A Partnership is a formal working arrangement between two or more individuals to manage and operate a business, and share the resulting profits.

Within a Partnership, all Partners are equally personally liable for any resulting liabilities as well as sharing equally in the profits. This is an important consideration before forming a Partnership. A Partner could stand to lose all of their personal assets, as liability for debts is not restricted to the Partner who entered the agreement.

(As an aside, we would always recommend a Partnership Agreement be drawn up to reduce friction around difficult circumstances in future.)

There are variations on the ‘normal’ Partnership structure, such as Limited Liability Partnerships, and Limited Partnerships.

The profits made by a Partnership are included in a Partnership Tax Return each year, and your share of the income is then included in your Self Assessment Tax return. Both Returns must be submitted by the 31^st January each year.

The following articles are relevant to an Ordinary Partnership, in which each Partner is jointly and severally liable, run the business together and share the profits. Though posts in this section are specific to Partnerships, and therefore limited in number, please do look at the posts and articles in other sections of our Information Centre which apply far more generally to business owners.