Structure guide
Ordinary business partnership
Two or more partners run a business together, share its profits and personally share responsibility for it.
What it means
Partners share ownership, decisions, profits and responsibilities. One nominated partner manages the partnership return and business records, while every partner has individual tax responsibilities.
Regular responsibilities
- Register the partnership and partners with HMRC.
- Maintain partnership records.
- Submit the partnership return.
- Each partner reports and pays tax on their profit share.
- Check VAT, payroll and MTD obligations.
The agreement matters
A written partnership agreement should address contributions, profit shares, drawings, authority, working commitments, absence, disputes, retirement, death and how the business can end.
Personal responsibility
An ordinary partnership does not automatically provide limited liability. A partner’s decisions can affect the partnership and the other partners, so legal advice and appropriate insurance can be important.
When to compare a company or LLP
Compare incorporated structures where liability, valuable contracts, borrowing, investment, unequal rights, succession or a future sale matter. An LLP is not simply an ordinary partnership with a different name.