Test yourself

Partnerships

Setting up
In a partnership, you and your partner (or partners) personally share (1 p.) for your business. This includes:
• any losses your business (1 p.)
• bills for things you buy for your business, like stock or equipment
Partners share the business’s profits, and each partner pays (1 p.) on their share.
A partner does not have to be an actual person. For example, a limited company counts as a ‘legal person’ and can also be a (1 p.) .

What you need to do
When you set up a business partnership you need to:
• choose a name
• choose a ‘nominated partner’
• register with HM Revenue and Customs (HMRC)
The ‘nominated partner’ is responsible for managing the partnership’s tax returns and keeping business records.

Naming your partnership
You can trade (1 p.) your own names, or you can choose another name for your business. You do not need to register your name.
You must include all the partners’ names and the business name (if you have one) on official paperwork, for example invoices and letters.

Business names
Business partnership names must not:
• include ‘limited’, ‘Ltd’, ‘limited (1 p.) partnership, ‘LLP’, ‘ (1 p.) limited company’ or ‘plc’
• be offensive
• be the same as an existing trade mark
Your name also cannot contain a ‘sensitive’ word or expression, or suggest a connection with government or local authorities, unless you get permission.

Register the partnership
You must register your partnership for Self (1 p.) with HM Revenue and (1 p.) (HMRC) if you’re the ‘nominated partner’. This means you’re responsible for sending the partnership tax return.
The other partners need to register separately.
All partners also need to send their own tax (1 p.) as individuals.
You must register by 5 October in your business’s second tax year, or you could be charged a (1 p.) .
Example
If you started a partnership or became a partner during the 2018 to 2019 tax year, you must register before 5 October 2019.

Registering for VAT
You must also register for VAT if your VAT taxable turnover is more than £85,000. You can choose to register if it’s below this, for example to reclaim VAT on business supplies.
You can appoint an agent to deal with HMRC on your (1 p.) .