Partnerships

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One of the biggest decisions a budding entrepreneur or businessman has to make is to decide what kind of company structure he envisions for his future business.

Partnership and a Sole Proprietorship (trader)....

....are both forms of self-employment. A partnership basically means that there are two or more people who claim ownership of the business. Both these options are considered the simplest methods in which to trade. Based on UK law, a partnership or sole proprietorship must keep all their invoices and receipts for six years as well as keep a detailed record of the money that was earned and the money that has been spent for the business. Additionally, a Personal Tax Return must be filed at the end of the tax year. The said income and expenses will then be declared at this point.

Being self-employed businessmen who enter into these two discussed options must pay their own self assessment tax and National Insurance contributions. Businessmen who undergo these tasks must be able to show details of their income, gains, reliefs, and allowances. A faithfully kept record will make these tasks easier.

It is recommended that business owners who enter into a Sole Trader/Partnership, unless their income is very small, should hire an accountant to perform these tasks in their behalf. It may be considered an expense but a good accountant can end up saving the company more money.

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