A slightly less formal and official form of organisation than a limited company, partnerships are often used to provide structure and legitimacy to professional services businesses such as accountants, solicitors, architects or surveyors.
In much the same way as a limited company, a partnership portrays an image of greater credibility to prospective clients. Unlike a limited company, however, no party can be held responsible for the debts or negligence of another, making a partnership well worth considering for organisations made of up individual fee earners, all of whom manage their own clients or projects.
With a limited company, the company itself is responsible for paying corporation tax on its profits. With a partnership, however, each individual shareholder (or partner) is responsible for paying their own income tax on their share of the profits. As above, this makes the partnership route ideal for professional services businesses where one partner may bill substantially more or less than another.
Not only can a partnership help to cement and focus the commitment of all parties, they also have the potential to create a business based upon a number of people, each bringing complementary skills, experience and networks to the table. Add the fact that partners can be paid as both salary and dividend (frequently leading to tax savings) and it’s no surprise that partnerships have become one of the three most common ways of setting up a business in the UK.
Why choose Phil Owen & Co.?
Despite the obvious advantages of partnership formation, forming an effective partnership can be far more complex than you might imagine.
Whether Limited Liability Partnership (LLP), Partnership or joint venture, Phil Owen & Co. will guide you through the formation process from start to finish.
We’ll make sure you understand all relevant legislation with regards to liability, ensuring that any documentation is registered exactly where and when it should be. What’s more, as one of Liverpool’s most respected independent accountants, we’re ideally placed to prepare accounts for the partnership itself, registering it for the correct VAT scheme and submitting both its VAT returns and its partners’ self-assessment tax returns on time.
For those looking for start-up funding, we’ll point you in the direction of the best places to obtain loans or grants, providing independent and truly impartial advice as to which route might be best for your partnership.
Interested? Book a free, no obligation consultation with one of our Chartered Accountants. Get in touch today.