Who can be a partner?
Whenever two or more people set up a business together, a partnership exists. The simple answer is therefore, anyone can be a partner; providing they are over 18 and legally able to work in the UK. A limited company can also be a partner. However, there are many important considerations for those entering a partnership.
Becoming a partner
When setting up a business with one or more other people, there are various options and structures available:
- To set up a business without becoming a partner, register as an incorporated limited company
- To be a partner but with limited liability, consider setting up an LLP or limited partnership instead
- General partnerships will be governed by the Partnership Act 1890 â€“ but the vague nature of this act means it is essential to create a separate partnership agreement or Deed that protects your interests.
Our partnership law solicitors can advise on the best business structure for your circumstances, and help draw up an agreement if you decide to go down this route. Partners enjoy self-employed tax status and, if there is no agreement to the contrary, an equal share of all profits; however, partners are jointly liable too. A general partnership is not considered a legal entity, and unless there is an agreement to the contrary, will be dissolved if a partner leaves, dies or retires.
Who can be a member of an LLP?
Under the Limited Liability Partnership Act 2000, members of an LLP will only be liable for their own financial contributions. Unlike a general partnership â€“ which can be created by verbal or informal agreement â€“ setting up an LLP requires incorporation with Companies House. Again, anyone can be a member of an LLP, while general partnerships can also be converted to an LLP.
For additional information or advice on who can be a partner, or assistance with matters from disputes to partnership accounts, contact our team of expert partnership law solicitors on 0161 832 6131.Back to our services