Sometimes two heads are better than one, and many people opt to set up a partnership to share the workload and accountability of running a business.
Under a partnership, the partners personally share responsibility for the business, including any losses made and bills incurred.
Partners also share the profits made and each partner pays tax on their own share.
Though usually formed between two or more people, partnerships can also include limited companies alongside individuals.
How do I name my partnership?
Partners can choose to trade under their own name or select another name for the business.
It is not necessary to register the name of the partnership, although all partners’ names and the name of the business should be included on all official paperwork.
Business partnership names must not include the words ‘limited’, ‘Ltd’, ‘limited liability partnership’, ‘LLP’, ‘public limited company’ or ‘plc’.
They must also not match any existing trademarks or suggest a connection with government or local authorities, unless you get permission.
How do I register a partnership?
You must register your partnership for self-assessment with HMRC if you’re the ‘nominated partner’. This means you’re responsible for sending the partnership tax return. The other partners need to register separately.
All partners also need to send their own tax returns as individuals.
You must register by 5 October in your business’s second tax year, or you could be charged a penalty.
You can also register the partnership using an SA400 form if you cannot register online, and register as a partner using an SA401 form.
Do I need to register my partnership for VAT?
You must register your partnership for VAT if your taxable turnover is more than £85,000, although you may also choose to register if it’s below this, for example to reclaim VAT on business supplies.
Can you help me set up my partnership?
Of course! Cooper Accounting works with partnerships to help them make the best possible start.
We can guide you through the process, file paperwork and provide practical advice.
Get in touch to set up an informal chat.