Partnership Business Start Ups

Partnership Business Start Ups

A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business. Partnerships are often favored over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it is distributed to the partners (i.e. there is no dividend tax levied).

However, depending on the partnership structure and the jurisdiction in which it operates, owners of a partnership may be exposed to greater personal liability than they would as shareholders of a corporation.

It may be necessary for a 'Partnership Deed' to be drawn up. Whilst this is not required by law it sometimes can be useful to resolve disputes or where, for example, the profits of the business are not to be shared equally.

You may also consider the option of establishing your business as a limited partnership. Whilst the concept of limited partnerships has been available for some time, new legislation has been introduced to widen the scope of such partnerships.