A partnership occurs automatically whenever two or more people set up in business together with a view to making a profit. A partnership occurs whether or not you want one to occur. The terms of a partnership are set out in the 1890 Partnership Act, although the terms can be amended if you draw up a separate partnership agreement, or partnership deed, to regulate the partnership. If you haven't done this, speak to us quickly.
Many of our clients find they wish to form a Limited Liability Partnership or LLP. These are like general partnerships but, with limited liability. An LLP is a specific partnership formed under the Limited Liability Partnership Act 2000. It is in a way a half way house between a partnership and a company. It provides the members (which is what the partners are called) with limited liability. The LLP is a person at law and can employ staff and enter into contracts unlike a partnership. However, the members are taxed as individuals as in a partnership. As with partnerships, LLPs should have agreements to control the relationships between the members.
An LLP needs formal incorporation. You need to register the LLP at Companies House. If all this sounds confusing, you don't need to be! Call on of our Partnership Law experts on 0161 832 6131. We will help help you register an LLP and draft partnership agreements. Contact us for a free initial consultation.