The partnership needs to contact its local HM Revenue & Customs (HMRC) office to let it know that the business exists. Each partner needs to register as self-employed and must do this within three months of starting up. It’s advisable to draw up a formal written partnership agreement before starting to trade in order to avoid future arguments and potential disputes.
This type of agreement typically sets out how the partnership will be run, the amount of capital each partner is to contribute to the business, their individual responsibilities and how profits will be split.
Preparing a formal partnership agreement can have other benefits, as it gives the partners time to talk about their hopes and aspirations for the business and to iron out any differences in opinion before starting out. This enables them to agree in advance how the partnership should be run and what responsibilities each partner will have. For advice on drawing up a partnership agreement, you should contact your accountant or solicitor.Last Updated
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Setting up and running a partnership
