A partnership is when two or more people start up a business and contribute capital to the business with shared responsibility and rights. In a partnership it is crucial to draw up a partnership agreement specifying every partner’s responsibilities and profit shares. In a partnership, partners are liable for the business liabilities and debts.

Starting up a business as a partnership is quite simple. As a partnership you need to register your business with HMRC. A partner needs be designated as the nominated partner who will be responsible for all the record keeping and reporting requirements.

In a partnership business, individual partners are classed as a self-employed and must register with HMRC. In a partnership, partners need to report their share of partnership profits or losses with other income via a Self-Assessment tax return; pay income tax on their share of the profits and pay class 2 and class 4 NICs. This can be stressful and daunting for the partners. However, at SEARS Accountant with our team of experts we can take care of all business legal and financial requirements.