Ensuring a partnership agreement or LLP works best for you and your business
- There are different types of business partnerships, from simple agreements to the more formal LLP.
- It’s important you understand their advantages and disadvantages, and which is best suited to your business.
- We’ll discuss your circumstances and advise on the best route for you.
- We can set up a partnership, advise on an existing agreement, resolve a partnership dispute and support you with any other aspect of partnership agreements.
What is a partnership?
A partnership is a type of business structure in which two or more individuals come together to own and operate a business. Partnerships can be established for a specific project or for an indefinite period of time, and partners typically share profits and losses in accordance with their agreement.
In an Unlimited Partnership, two or more individuals simply come together to form a business. The accounting and tax aspects are relatively straightforward, but each partner will be personally liable if the business incurs debts.
To overcome this last drawback, there’s an alternative: the LLP (Limited Liability Partnership). The LLP is a corporate body with its own identity, separate from the individual members. The LLP itself is liable for debts incurred in running the business, giving individual members more protection from liability than in an Unlimited Partnership. In both versions, individuals’ income from the business is treated as personal income, which is taxed at the appropriate rate.
Although it has the advantage of helping protect you from business debt, there are also disadvantages to an LLP. It’s more complex, and has to be set up with formal legal documents and registered at Companies House.
How Moore Barlow can help
We’ll discuss your business circumstances and advise you on which type of partnership is most suitable for you (or whether it would be better to set up a limited company). We can help with any aspect of partnership agreements, including:
- explaining your responsibilities in the different types of partnership
- setting up new agreements or advising on existing agreements
- appropriate notice periods when partners want to retire
- including arrangements to force a partner to leave if necessary
- resolving disputes between partners.
Sometimes we are asked to help when one partner does not want to be responsible for another partner’s debt, which they are not protected from under conventional partnership law. We can draft partnership agreements to include protection for individual partners.
You can be reassured by our experience and reputation for giving sound, helpful advice on partnerships and LLPs. You can trust us to listen and understand what matters most to you and your business, and respond with a pragmatic, personal service that’s tailored around your specific commercial needs.
We have offices in Southampton, London, Guildford, Richmond, Woking and Lymington. Contact us for specialist advice.