{"id":1703,"date":"2018-11-20T12:57:10","date_gmt":"2018-11-20T12:57:10","guid":{"rendered":"https:\/\/www.tayloremmet.co.uk\/blsblog\/?p=1703"},"modified":"2018-11-20T12:57:10","modified_gmt":"2018-11-20T12:57:10","slug":"starting-a-business-partnerships","status":"publish","type":"post","link":"https:\/\/www.tayloremmet.co.uk\/blogs\/starting-a-business-partnerships\/","title":{"rendered":"Starting a Business: Partnerships"},"content":{"rendered":"

Following on from our discussion of Companies, you may have decided that a Limited Company is not right for you. Another alternative is a Partnership.<\/p>\n

Without realising, you may already be in a Partnership. Two or more people carrying on business together with a view to profit is a Partnership and brings with it certain consequences. It is therefore very important that you consider carefully the consequences of going into business with somebody and if appropriate seek advice before doing so.<\/p>\n

Rules for a partnership<\/strong><\/h3>\n

In the absence of an agreement, the Partnership Act 1890 will determine each party\u2019s rights and obligations with the other partnerships. You could therefore be subject to Victorian legislation which may not be right for you.<\/p>\n

In the absence of agreement, all profits and losses are shared equally between the partners. This means that you, as a partner, could be responsible for the debts of the partnership, even if you have not been aware of them and even if your partner has been acting in a way that you would not approve of. Unlike a company, there is no formal management structure laid out in a partnership and so everybody has joint responsibility.<\/p>\n

Terminating a partnership<\/strong><\/h3>\n

The partnership can be brought to an end by any of the partners notifying the others of their intention to terminate the partnership. It can be very difficult to retire from a partnership. In general, debts incurred by the partnership whilst you are a partner are still your responsibility, even after your retirement. We often advise our clients to explicitly agree, in advance, how the partnership can be bought to an end.<\/p>\n

The partners themselves are responsible for the costs and expenses of their business, including the costs of any litigation. If the partnership is successfully sued, the partners are responsible for meeting the costs of that claim. A partnership does not have the same protection for its members that a company limited by shares does.<\/p>\n

Partnership Agreement<\/strong><\/h3>\n

We therefore strongly recommend that you prepare a Partnership Agreement before entering into a partnership. The following matters are often dealt with:-<\/p>\n