A Partnership is a UK business structure allows two or more people to co-own a business.
Follow these steps to guide you through setting up your Partnership.
Check Forming a Partnership is Right for You
In a Partnership you and your partner share in the profits (or losses) of your joint business.
There are other options available such as:
- Self-employed or sole trader;
- Limited Company;
- Limited Liability Partnerships.
When Do You Need to Register
You need to register your Partnership by the 5th October following the end of the tax year you started trading.
A tax year runs from 6 April to 5 April each year.
So if you started your new business on 1 February 2020, you’ll need to register your partnership with HMRC by 5th October 2020.
Choose a Name
There are some rules you need to follow when it comes to choosing a name for your partnership.
You can choose any name you like but you cannot use:
- Anything explicit;
- Words like LLP or Limited as those are reserved for business that register with Companies House.
I’ve put together a list of Do’s and Don’ts when it comes to naming your business.
Choose a Nominated Partner
Every partnership needs to elect a nominated partner who will be responsible for ensuring the Partnership Tax Return is filed, keeping business records and will act as the point of contact for HMRC.
Register with HMRC
You can register your Partnership online on the HMRC website.
In addition to registering the business, each Partner in the business must register as self-employed (or sole trader) because they will need to fill out a tax return each year showing their portion of any profit or losses, and paying any tax due on this.
New Here? Learn how to set up the financial side of your business with these easy to understand guides and resources:
- Sole Trader or Limited Company? – Download my free calculator to check which business structure would help you to pay less tax;
- Tax Records and Bookkeeping – Understand what tax records you’ll need to keep and how to set up your own bookkeeping system;
- Self Employment Taxes Explained – Learn what taxes you’ll pay, how much and when;
- VAT Guides – From registration to de-registration, VAT schemes and thresholds, these guides will take you through the basics every UK small business owner needs to know;
- Invoice Template – Free template and step-by-step guide so you can get paid by your clients.