Looking to go into business with someone but without the formality, legal or tax obligations of a limited company? Partnerships work in the true sense of the word with shared responsibility, trust, and the ability to bring in new partners as knowledge and skill gaps emerge.
What makes a Partnerships accounts different to other business structures?
A partnership is where two or more people have joint responsibility for the business and its finances.
Partnerships are formed for a variety of reasons, from sharing skills, knowledge, contacts, financials, or assets
Partnerships are more similar to a sole trader than a limited company in terms of both tax reporting and payment. Profits are shared between the partners and flow directly through to the partners’ personal tax returns rather than initially being retained within the partnership. In a limited company, by contrast, profits are retained by the company until paid out, whether as salaries under PAYE or as dividends.
Are accounts more complicated with a partnership?
In comparison to some business setups, yes, partnership accounting can be complex.
It will be down to how many partners there are and how you separate their investment from the trading activities of the business.
With different owners in charge of their own parts of the business, income and expenditure will not always be visible to each partner. Therefore, it is highly recommended to use an accountant to act as a third party with oversight on all transactions. This helps ensure the funds are available and all parties are kept apprised.
This becomes especially important when proportioning profits to each partner.
The services we provide your partnership
While there are more of you to spread the business responsibilities between, you should still be looking to maximise your time on the areas your knowledge and drive is best suited to.
That is why we at U&W provide a full suite of accounting services so that all partners are focused on the importance of growth. These services include:
Your own dedicated accountant
Preparation for statutory year end accounts
Xero cloud accounting software
Partner tax returns
Advice on partnership accounts setups
Reviewing and amending account structures when a new partner comes on board or an existing one leaves
If you want to know more about the ways we can help your business run more efficiently and grow then contact us on 0161 443 2280