{"id":50,"date":"2026-05-26T13:26:12","date_gmt":"2026-05-26T12:26:12","guid":{"rendered":"https:\/\/clearlybusinesslaw.mrsdemo3.co.uk\/?p=50"},"modified":"2026-05-26T13:26:12","modified_gmt":"2026-05-26T12:26:12","slug":"setting-up-a-business-partnership","status":"publish","type":"post","link":"https:\/\/clearlybusinesslaw.mrsdemo3.co.uk\/?p=50","title":{"rendered":"Setting Up a Business Partnership\u00a0"},"content":{"rendered":"<h1 class=\"wp-block-heading\">Setting Up a Business Partnership <\/h1><p class=\"wp-block-paragraph\"><span>Mar 12, 2024<\/span> | <a href=\"https:\/\/clearlybusinesslaw.co.uk\/category\/business\/\" rel=\"category tag\">Business Law Articles<\/a><\/p><figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" src=\"\/\/www.w3.org\/2000\/svg'%20viewBox='0%200%201080%20675'%3E%3C\/svg%3E\" alt=\"Clearly Business - Partnership\" width=\"1080\" height=\"675\" data-lazy-sizes=\"(min-width: 0px) and (max-width: 480px) 480px, (min-width: 481px) and (max-width: 980px) 980px, (min-width: 981px) 1080px, 100vw\"><\/figure><p class=\"wp-block-paragraph\"><span>\u2026A Business Partnership is a fairly straightforward way for two or more people to set up a business together. The challenge is that there\u2019s no limited liability, which means that each person in the partnership is liable for all the debts of the business. In other words, if the business fails, you may end up owing a lot of money.<\/span><span><br aria-hidden=\"true\"><\/span><\/p><p class=\"wp-block-paragraph\"><span>In order to guard against this, some partnerships opt for a limited liability partnership model. Or you could consider setting up a limited company where the liability is limited to the face value of the shares.<br aria-hidden=\"true\"><\/span><\/p><p class=\"wp-block-paragraph\"><strong><span>Features of a Business Partnership<\/span><\/strong><\/p><ul class=\"wp-block-list\"><li>Fairly simple to set up<\/li><li>Partners pay income tax on all profits<\/li><li>Unlimited liability<\/li><li>No formal registration requirements (unlike other corporate entities)<\/li><\/ul><p class=\"wp-block-paragraph\"><strong>What happens if you don\u2019t have a Partnership Agreement?<\/strong><\/p><p class=\"wp-block-paragraph\">If a Partnership Agreement is not drawn up, business partners run the risk of being subject to the default provisions of the Partnership Act 1890 which include:<\/p><ul class=\"wp-block-list\"><li>Partners must share equally in capital and profits (regardless of their initial capital contributions)<\/li><li>Partners must contribute equally to losses<\/li><li>Admitting a new partner requires unanimous consent of all the partners<\/li><li>A partner has no right to retire (giving notice to retire in some instances will have the effect of dissolving the partnership)<\/li><li>There is no power to expel a partner<\/li><li>Death of any partner will lead to the partnership automatically dissolving                                                      To avoid uncertainty and reduce risk, it\u2019s important to have clear, professionally drafted <a href=\"https:\/\/clearlybusinesslaw.co.uk\/business-contracts\/\"><span><strong data-start=\"709\" data-end=\"731\">business contracts<\/strong><\/span><\/a>in place that reflect how your partnership actually operates.<\/li><\/ul><p class=\"wp-block-paragraph\"><strong>Why have a Partnership Agreement?<\/strong><\/p><p class=\"wp-block-paragraph\">A Partnership Agreement governs the relationship between the partners and provides: (a) certainty for the partners on how the business operates; and (b) options for the Partnership to decide how to resolve any disputes, to prepare for the unexpected and most importantly, provide options where the Partnership Act does not.<\/p><p class=\"wp-block-paragraph\"><strong>A Partnership Agreement should cover:<\/strong><\/p><ul class=\"wp-block-list\"><li>How you\u2019ll split profits<\/li><li>How you\u2019ll make decisions<\/li><li>What will happen if the partners can\u2019t agree \u2013 who will have the casting vote, or how will you resolve the issue<\/li><li>What role each of you will play in the new business<\/li><li>What happens if one of the partners leaves or a new one joins?<\/li><\/ul><p class=\"wp-block-paragraph\"><strong>Your next move?<\/strong><\/p><p class=\"wp-block-paragraph\">If you would like a Partnership Agreement drawing up or to discuss your business partnership, please contact our Commercial Team on info@clearlybusinesslaw.co.uk<\/p><p class=\"wp-block-paragraph\">As always, the team are here to help you.  To get in touch just call us on <a href=\"tel:02037402370\">020 3740 2370 <\/a>or email <a href=\"mailto:info@clearlybusinesslaw.co.uk\">info@clearlybusinesslaw.co.uk<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Setting Up a Business Partnership Mar 12, 2024 | Business Law Articles \u2026A Business Partnership is a fairly straightforward way for two or more people to set up a business together. The challenge is that there\u2019s no limited liability, which means that each person in the partnership is liable for all the debts of the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":93,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-50","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Setting Up a Business Partnership\u00a0<\/title>\n<meta name=\"description\" content=\"Setting Up a Business Partnership\u00a0 : A Business Partnership is a fairly straightforward way for two or more people to set up a business together...\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta 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