Partnership

Partnership

Introduction

Partnership occurs where two or more people go into business together with the intention of making a profit. Establishing their business and registering as self-employed they share the decision making, any profits the business makes and also any debt the business accrues. The partnership business itself, has no separate legal structure and entirely rests on the partners. So once they retire, die or move on, the business ceases. There are various types of partner who might form part of what a partnership is. These include:

An ordinary partnership is made up of what the sort of business discussed so far. Subject to all the liabilities that a partnership business might encounter in its functioning. Partners are made up of two or more of the above types of partner and each must be registered as self employed, submitting individual (Self Assessment) tax returns each year. They must also pay NI and other relevant contributions.

Another legal form exists as a half way point between forming a limited company and running an ordinary partnership. This is a limited liability partnership. Quite simply, a limited liability partnership is a business where the individual partners are not responsible for the debt the business accrues. They share the running of the business in the same way as partners in an ordinary partnership, but avoid the personal risk to their own finances in the same way as shareholders in a limited company do. The other main difference is that limited liability partnerships must be registered with Companies House. For more information, see our website page and our limited liability partnership formation service.

Discussion

An account has to be arranged from the first day the juristic person is registered. The type of the prepared account, messages and items in the account, the period used for entering the account and document are used for entering as stipulated.

The first time of the account closing is within 12 months from the first date of the account, in other words, the first date of registration as a juristic person and next account closing is executed yearly from the previous close.

Prepare the income statement by entering summarized lists as identified in Form I which is attached in the declare of the Department of Business Development. The stipulation of summarized lists must be in the 2001 financial statement. Moreover, the partnership has to have a qualified auditor to examine and give the opinion to the financial statement except in case that the financial statement of the partnership has capitals, assets and total income lower than those specified in the Ministry's Code.

It is an alternative corporate business vehicle that gives the benefits of limited liability but allows its members the flexibility of organising their internal structure as a traditional partnership. The LLP is a separate legal entity and, while the LLP itself will be liable for the full extent of its assets, the liability of the members will be limited. Whereas in registered private companies the fact that they are a private company they are entitled to not ...