A partnership, is similar to a sole trader but with 2 or more people. A written agreement and profits between the partners are usually shared between the partners according to the agreement. Though profits may be shared unequally, raised liabilities are shared jointly. This is an important note to be well aware in partnership including even if you own 1% of the business, you will still be responsible for 100% of the liability.
What to do when you are in a Partnership.
· Register as an independent with HMRC within 3 months of your setting up
· Pay Class 2 National Insurance contribution – HMRC will send you Class 2 National bills every quarter, unless exempted due to small gross.
· Set up a separate or a particular business account If possible – Ask us if you need to open an account
· Finish an individual Self-Assessment tax return. You’ll need to fill in the partnership supplementary pages – SA104.
· The nominated partner must also finish a Partnership Return – SA800 – showing each partner’s share of the profits or losses.