A business run as a partnership shares control, responsibility and finances between two or more people. The partners are not only responsible for managing the business, but also "jointly and severally" liable for any debts incurred by the business and the profits are shared between the partners based on pre-agreed percentages.
Below are just a few examples of the advantages and disadvantages of running a business as a partnership.
Business partnership advantages:
Business partnerships are relatively easy to establish; make sure time is taken to draft a partnership agreement to avoid future problems.
With more than one owner, it may be easier to borrow money and raise capital to invest in the business.
The business can benefit by using the knowledge base and experience of all the partners.
Business partnership disadvantages:
Business partners are liable for the actions of the other partners.
Business partners, like sole traders are liable for the actions of the business.
Since decisions are shared, disagreements can occur and therefore the decision-making process can take longer.
TaxAssist Accountants can provide you with advice regarding all tax aspects of becoming a partnership or discuss the advantages of trading as a limited company. We love to help independent business owners thrive, so please do give us a call on 0800 0523 555 to book a free consultation with your local office.