There are several structures which a business can trade under; the partnership being one of the oldest. Partnerships are a popular business structure because there are fewer formalities compared with a limited company. For example, partnerships are easier to set up and the decision making process is simpler than a limited company. However this may not suit all businesses and expert legal advice should always be sought as to the correct business structure. For more information on setting up a new business follow the link below .
An important point to bear in mind is that a partnership can be set up without a formal written agreement. When two or more people are in business together and share profits then the law treats this as a partnership, regardless of what the parties intend. In the absence of a written partnership agreement a partnership is governed by the Partnership Act 1890. Often the provisions of the Partnership Act 1890 are not suited to a modern business and partners may find their rights and responsibilities under the Partnership Act very different to what they expect. Without a written partnership agreement shares of profits, partnership property and rights of partners who leave the property are all set by the Partnership Act. Often this fact remains undiscovered until there is a disagreement or falling out; which is too late.
The best way to ensure a partnership operates as the partners intend is to have a specialist business law solicitor draw up a formal agreement. Our business law solicitors specialise in partnership law and advise a wide range of clients from small start up businesses to established professional partnerships such as estate agents and accountants. For straightforward agreements we offer a fixed fee service. Click here to download further details and our free checklist of points to consider .
We have specialist commercial litigation solicitors who can provide expert advice on all partnership law disputes We have years of experience in negotiating with all parties involved to try and achieve a fair and acceptable settlement. We have pioneered the use of Alternative Dispute Resolution (ADR) which can lead to a quicker and cheaper method of resolving disputes. If all else fails we can handle any dispute right through to representation at court.
Limited Liability Partnerships (LLPs)
LLPs are an alternative form of business structure to traditional partnerships and limited companies. They operate in a similar way partnerships but the partners have lower liabilities for any debts incurred by the partnership. This may seem attractive but there are more administrative formalities with an LLP, as well as tax implications to be considered. A formal legal document, called a deed of partnership, is always required to set up an LLP and notifications have to be sent to Companies House. Therefore an LLP cannot be set up with out the help of a lawyer. Our business law solicitors provide advice on starting LLPs, will draw up the required documentation for you and register the LLP at Companies House.