Writing a business plan Writing a business plan Putting together a business plan will make you outline your business goals, get clear on your customers and products, sales forecasts and cost estimates and consider the true profitability of your business.
It is similar in many ways to going the sole trader route for an individual. A partnership is merely a vehicle linking two or more people in a simple business structure. If you want your new business to be a distinct legal entity you should consider forming a limited company.
The partners in a business partnership are usually self-employed individuals. However, it is also perfectly acceptable for a limited company to be one of the partners in a partnership. The nominated partner is responsible for registering the partnership with HMRC.
When a new partnership is registered, the nominated partner will be automatically registered with HMRC for self assessment tax. As a partnership, you will not need to notify Companies House, nor deal with any administrative or accounting requirements which are required of limited companies.
Partnerships — Tax matters When you start the new business, each partner will need to inform HMRC that they are now self employed.
In terms of accounting, you will need to submit an annual self assessment form to HMRC and keep accurate and up-to-date records of all business transactions and accounts.
The partnership itself will also have to submit an annual self assessment form as well as one for each partner. You will pay income tax and national insurance contributions on the profits the partnership makes.
All partners will need to register with HMRC for self assessment tax, and the partnership itself will also need to be registered. We recommend contacting an accountant before starting a partnership — they will be able to go through the registration process with you, and answer any tax questions you may have.
Partnerships — Legal issues It is worth bearing in mind that if either of the partners withdraws from the business if they die, resign or go bankruptthe partnership must be dissolved instantly, since it has no legal status.
Although most people enter partnerships with the best of intentions, problems can occur later down the line — particularly if one partner wants to pursue a different course for the business, or wants to leave the partnership. For this reason, you should always draw up a partnership agreement which details how the business will be run, including how much each partner invests, how they intend to work together, and how to deal with changes to the partnership.
In the absence of a deed of partnership, the Partnership Act is used to legislate issues which may arise, the terms of which may well be unsuited to the way you run your business in practice As setting up in business is an important decision to make, we recommend you talk to a local accountant before taking the plunge.
They will be able to advise you on tax basics, as well as how to inform HMRC that you have started a new business. As there is no central database of partnership names in the UK, we recommend you search the net and browse local business directories to avoid using a name used by another business.
More help on the different business structures Deciding on which business structure to use for your new business is an important step when you are starting up.
For more guidance on the different options, read these other ByteStart guides.Start-Up Business Plan ENTER. Starting a Practice Staffing Business Budget Personal Budget 1st-Year Business Set up a merchant processing account so you can accept customer payments via Visa, MasterCard, etc.
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