How do I go about setting up a Business Partnership with 3 others?

[fodigie]

Myself and 3 friends have a business idea which we all want to pursue. We all want to invest an equal share of approx. £10k.

What legalities do we need to complete in order to formalise our partnership?

How do we register with HMRC? Do we also need to complete individual Tax Returns as well as Partnership? Also, do we need to engage a solicitor to form an agreement between ourselves?

I know we will eventually need to authorise an accountant but at the moment we are trying to save money.

Any advise would be appreciated.

 

[ethical PR]

Have a search on the threads and you will see how many people have got into legal and financial difficulties because of a lack of a shareholders agreement.

You need to decide whether you want a partnership or to form a limited company . Not investing in advice from an accountant and solicitor at this stage would be a false economy particularly when you are investing 40k I'm the venture.

 

[Scalloway]

Myself and 3 friends have a business idea which we all want to pursue. We all want to invest an equal share of approx. £10k.

What legalities do we need to complete in order to formalise our partnership?

Get a solicitor to draw up a partnership agreement. Not doing so is a false economy

How do we register with HMRC?

https://www.gov.uk/register-for-self-assessment


Do we also need to complete individual Tax Returns as well as Partnership?

Yes

Also, do we need to engage a solicitor to form an agreement between ourselves?


You don't have to but not doing so is a false economy

I know we will eventually need to authorise an accountant but at the moment we are trying to save money.

Not doing so is a false economy


Any advise would be appreciated.

An insolvency practitioner once told me that you should take more care choosing a business partner than finding someone to marry. Each partner is jointly and severally liable for business debts - ie if you have money the firm's creditors will chase you for repayment regardless whether you had anything to do with incurring the debt personally.