Two or more individuals can start a partnerships and the business is managed by the partners who often have an formal agreement drawn up to decide how profits (or debts) should be divided and can look at what happens if a partner wants to leave or dies.
Each partner must register as self employed with HMRC and submit a tax return. The nominated partner must also register the Partnership with HMRC and complete a Partnership Tax Return – showing each partner’s share of the profits or losses.
Limited Liability Partnerships have characteristic of a limited company which involves registered with companies house and filing accounts.
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