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business_partnershipAre you interested in starting up a small business as a partnership, or do already have a small or medium sized enterprise and want to bring in someone new as a partner?

If you answered “yes” to either of these questions then there are certain legal partnership agreements that you will need to consider.

What Constitutes a Partnership?

A partnership is when two or more people decide to go into business together and equally share in its profits.

 

A partnership is when two or more people decide to go into business together and equally share in its profits.

Because it is relatively easy to set up, partnerships are a very popular way to form a business. All partners involved are considered self-employed. It is widely advised that such business set-ups are governed by partnership agreements.

Unlike other business structures like a limited company, the legal entities consist only of the partners (no shareholders, etc.). In the event that something unfortunate happens to the partnership, e.g. bankruptcy, resignation or death of a partner, the partnership must be dissolved. In this scenario, a partnership dissolution agreement is advised. However, the business can continue to function whilst a new structure is put into place.

Partnership Agreements and Liability

Unlike a “limited” partnership, all persons in a partnership are liable for any debts or liability that may occur from the business. In Northern Ireland, partners are not severally liable. This means that no one partner has to pay off the entire debt. However, should a partner resign, the remaining partners may be liable for the debt that remains. In the case of insolvency, creditors can go after the assets of any or all partners.

Because of these legalities, it is best that you research a proper partnership agreement suitable to you.

How Do I Set Up a Partnership?

There are several recommended steps to follow in order to form a successful business partnership. Listed below are some of the most important factors you should consider.

Online Business Partnership Agreement

Whether you’re starting up a business partnership or adding a partner to an existing business, it is often recommended that you have a solicitor draw up the necessary partnership documents.

However, there are many reputable online websites that offer very affordable partnership agreements without the need for hiring a solicitor.

The Synergy Group will guide through this whole process.