How to start a business partnership

You may be in a business partnership and not know – because under English law, a partnership agreement is two or more people acting together in business to make a profit. Here are the ground rules to safeguard your cash and assets in the event of something going wrong:

1. Work out a written partnership agreement so everyone knows where they stand over control of the business, money and debts.

You can download excellent template forms covering all the points you should consider from Net Lawman.

2. Partners need to register with HM Revenue and Customs as self-employed

3. If the business fails, all partners are responsible for all business debts, so if one partner has a property portfolio and the other rents their home, the partner with the most assets can be sued for all the partnership debts regardless of his or her share in the business.

4. Partners are entitled to a share of the profits pro rata with their share of the partnership – for instance if the partnership is 50:50, then each partner is entitled to half the profits.

5. Partnerships can start trading without any formal permission, as long as the business does not need formal licensing

The Net Lawman UK has several partnership agreements and documents for download, as well as many other business documents a partnership might need.

Other Useful Links: Share Transfer Form

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