General partnerships are the simplest, most common partnership structure. A general partnership consists of two or more general partners who are responsible for providing capital and equipment to start the business, and also share management of the business. They are all involved in all aspects of the business and are all liable for any debts incurred. The degree to which each person is involved and liable is usually set out in a partnership agreement before the business is formed. General partnerships also have important tax structures. In a general partnership, the individual partners are taxed separately, rather than the business itself.
Once you and your partners have decided to form a general partnership, you will need to choose a name for your business and check your chosen name’s availability with Companies House. It is also worth considering whether you want to register your company’s name with the Intellectual Propery Office to guarantee its protection.
There are a few bureaucratic steps to take before you can open for business. You will need to register your business with the Companies House to ensure that you have given public notice of your company’s general information. Your next step is to register with the Her Majesty’s Revenue & Customs (HMRC) to get register for Self-Assessment taxation online or using form SA400 if you wish to register through the post.
You will also need to open a business bank account for your company. Contact your bank ahead of time to find out if there are additional documents you require to open an account. Some banks ask for a fictitious name certificate (if the business’s name is not the name of the partners) or a copy of the partnership agreement.
Your final step is to ensure that you have obtained any and all relevant required business and trade licenses to operate your business. These vary depending on the type of business you have, so be sure to consult with your local authorities office to ensure that you have the right licenses. A guide can be found online here.
As always, if you are unsure or have any questions about setting up your general partnership, consulting with a specialised business solicitor is the best course of action. This will guarantee that you have all your permits in order and are legally watertight in terms of business operations and taxation.