There are many reasons for not choosing a Partnership in your position, for instance:

  • They are less tax efficient than Limited Companies
  • Partners must pay Class 4 National Insurance
  • All Partners are responsible for all debts
  • Partnerships can result in disagreements if there is no legal agreement. (A Limited Liability Partnership could be better).

Here are some advantages to a Partnership over a Limited Company structure:

  • Income can be apportioned more flexibly between Partners (but please get a legal agreement)
  • The rules for paying owners varying proportions of profit are less rigid than for Company dividends.
  • Partners’ cars can be more easily used to save tax