Partnership Accounting Services
Partnership is an arrangement where two or more parties come into an arrangement to achieve a common goal by creating synergy. Partnership can be arranged between two individuals, politics, education or businesses. Normally equal profits and losses are shared among partners unless an agreement is signed specifying particular distribution ratio.
A different type of partnership known as joint venture, which is come into existence for temporary form of project and disband after the completion of project.
Investment, Contribution & Profit sharing
At the time of forming partnership arrangement, the partners negotiate and decide the distribution of risk and rewards, investment by each partner, level of give and take, areas of responsibility and line of authority. It may be possible that one partner introduce capital while the other only contributes unique skills required to achieve the partnership goals or take entire management responsibility. In partnership all the profits and losses are shared equally among partners unless a signed agreement exists.
The partnership does not pay own tax on its profits and gains, instead the partners pay Income tax on their share of profit through self assessment, whether or not they withdraw their share (as in sole trader).
Sole trades businesses also required to register for vat if the taxable supplies exceed the threshold limit of £83,000.
Clauses of the partnership agreement:
Partners can include clauses like
- Investment to be contributed by each partner in business.
- Share of profit or loss of each partner
- Any interest to be paid to the partners, on capital by partners, and its rate.
- Any interest on drawings by partners.
- Clauses related to the management of the business, and to what extent any or all of partners can take part in the management.
- Any salaries if agreed among the partners.
- Any steps to be taken in case if any partner wants to retire from the business.
- Any conditions if any new partner or partners want to enter in the already existing partnership arrangement.
- Any clauses about the signatory of the bank if a separate business account exists.
If an agreement does not exist then the partnership act 1890 sec 24 apply, which states that partners are entitled to equal share of profit and capital and are liable to contribute equally towards the losses and risks, as well as many other specific guidance.
What is the benefit of having a partnership arrangement?
In a partnership arrangement, the main benefit is that the risk is reduced, as loss is mitigated by sharing among the partners. A partner can be present at business in absence of another partner. Also business can take advantage of expertise of different persons joined as partners.
It is easy to expand the business with the investment of new partners. Decisions can be taken fast in partnership as there are few decision makers.
The partners are liable personally for the debts. Both can be liable to the errors and mistakes of each other. Also the disagreements can arise in the business and can lead to partnership being dissolved.
Why tohire us?
The sole trader businesses are normally small and medium sized setups, where budget for the supporting activities like ‘’Accountancy’’ are often limited.
So it’s better to have expert outsourced accountants than hiring inexperienced accountants due to low budget.
Our services for Partnership business
- Your own dedicated industry specific accountant
- Accounting system implementation for the businesses.
- Manual bookkeeping services and Xero support services
- Year end accounts and bank reconciliation matters.
- Dealing with HMRC queries on your behalf.
- Registration for VAT and PAYE.
- Recommendation on tax efficient wages and dividends
- Completion and submission your self-assessment
- Unlimited help and advice via Skype, email, phone & live chat
- Assistance of Industry specific accountants.
- Reminders for all of your important deadlines
- Services you need in relation to registration as a sole proprietor.
- Matters related to trade mark registration of the business.
What we charge
We provide full set of accounts along with a range of additional valuable services in price which is favorable to you business.
We provide competitive fixed fee services starting from £20 for partnership.
Just put your business details and receive a quotation tailored to your business.