A partnership in business expands new doors of opportunities with shared costs and responsibilities, but also comes with a share in profit. However, in a partnership you can do something really big and make huge profits, so that even sharing won’t be an issue. So, if you are going to do a partnership business in UK, you must fulfil some legal requirements; this article will guide you through the complete requirements for setting up a partnership business in UK as well as the procedures to meet those requirements.
****Here we assume that you have already discussed the distribution of investment with your partners (and have it on paper) and so, this article will focus only on the registration and legal process.
Step 1- Identify the responsibilities:
Since all the partners share some responsibility for the business, you must have to clear the responsibilities on paper and get it duly signed by all the partners.
Step 2- Tax Deductions and Profit Sharing:
Profit can be shared between the partners and each partner can pay tax on their share of the profits and you must have this in written.
Step 3- Nominations for the Representative:
One partner must be nominated to complete the registration and other required procedures. Both the nominated partner and individual partners will be responsible for:
- Sending their personal Self Assessment tax return every year
- Paying their Income Tax on their share of the partnership’s profits
- Paying their National Insurance
- Paying any losses if business happens to face so
- Paying bills for the business – eg when they buy equipment, do marketing or extend an operation
- The nominated partner must also send the partnership’s tax return.
Step 4- Name Your Business:
Naming process for a business partnership is almost same as of naming a sole trader business. Check out the details about it in Sole Trader Business registration in UK section.
Step 5- Register for Self Assessment:
This is very much same process like one needs while registering a sole trade business. However, only nominated partner needs to undertake the whole process. Follow this link to register for partnership business self assessment: http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=H30HoN02iwU
That’s all you need to do in order to register your partnership in UK!