So if you are in business with someone else, here are the ground rules to safeguard your cash and assets in the event of something going wrong:
1.Work out a written partnership agreement so everyone knows where they stand over control of the business, money and debts.
You can download excellent template forms covering all the points you should consider from
2.Partners need to register with HM Revenue and Customs as self-employed
3.If the business fails, all partners are responsible for all business debts, so if one partner has a property portfolio and the other rents their home, the partner with the most assets can be sued for all the partnership debts regardless of his or her share in the business.
4.Property letting businesses are not business partnerships but investments, so partnership rules do not apply.
5.Partners are entitled to a share of the profits pro rata with their share of the partnership ? for instance if the partnership is 50:50, then each partner is entitled to half the profits.
6.If a partner leaves their share of the profits in the business, they are still taxed on their share
7.If trades under a business name, all paperwork must show the partners? names and an address for serving official documents
8.If a partner dies, resigns, or is bankrupted, the partnership automatically dissolves, so arrangements to continue the business need to be considered.
9.Partnerships can start trading without any formal permission, as long as the business does not need formal licensing
10.In a lot of cases, it's possible to set off partnership losses against some other income or business profits
The Net Lawman web site has several and documents for download, as well as many other business documents a partnership might need.
