Set up a business partnership

In a partnership, you and your partner (or partners) personally share responsibility for your business. This includes:

• any losses your business makes
• bills for things you buy for your business, like stock or equipment
• sharing the business profits, with each partner paying tax on their share

A partner doesn't have to be a person. For example, a limited company can also be a partner because it’s a ‘legal person’ - see set up a limited company.

How to set up a partnership

To set up a business partnership, you need to:

• choose a name
• choose a 'nominated partner'
• register with HM Revenue and Customs (HMRC)

Business partnership tax responsibilities

Each partner is responsible for paying tax on their share of the business's profits. The 'nominated partner' is in charge of handling the partnership's tax returns and keeping business records.

Differences between limited partnerships and LLPs

There are different rules for limited partnerships and limited liability partnerships (LLPs):

• limited partnerships - at least one partner has unlimited liability, while the other partners have limited liability.
• limited liability partnerships (LLPs) - all partners are protected from personal losses beyond their investment in the business.

See GOV.UK guidance on set up and run a limited liability partnership and set up and run a limited partnership.