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Forming A Partnership

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  • 30-09-2011 11:33pm
    #1
    ironclaw
    Registered Users Posts: 8,004 ✭✭✭


    Hi Folks,

    I'm looking for advice on how to start a Partnership (Not a Limited Partnership) I've looked at the options and I just need a low cost yet official way to do business with myself and friend as a partners. Is Partnership the best idea?

    As regards registering, I need to register a business / trading name with the CRO. Do I need to register the partnership? As regards forming one, is it just a solicitors drawn up document or is there more to it?

    Finally, regarding VAT and tax, what changes do I have to make for myself personally and for the business? Am I right in saying I declaring earnings from the partnership as income, and do it online with Revenue as part of PAYE etc?

    Many Thanks!


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    #2
    antoinolachtnai
    Registered Users Posts: 9,802 ✭✭✭antoinolachtnai


    Setting up a partnership is easy. You just declare that there is a partnership and that's it. In fact, that's one of the problems with partnerships.

    There are severe drawbacks to being in a partnership. The main problem is 'joint and several liability'. This means that if your partners run up big bills, you can be left carrying the can. Another drawback is that they are too easy to dissolve, and to protect against this you need a partnership agreement.

    If this is small, you are so tight for money, you should find a way to operate this as a sole trader setup, with subcontracting.

    If it is any way substantial and you and your fellow entrepreneurs will be investing any significant amount of time/money in, you should incorporate it.

    Do not go down the partnership route unless you have had specific professional advice and have put a partnership agreement in place.


  • Options
    #3
    AndyJB
    Closed Accounts Posts: 177 ✭✭AndyJB


    ironclaw wrote: »
    Hi Folks,

    I'm looking for advice on how to start a Partnership (Not a Limited Partnership) I've looked at the options and I just need a low cost yet official way to do business with myself and friend as a partners. Is Partnership the best idea?

    As regards registering, I need to register a business / trading name with the CRO. Do I need to register the partnership? As regards forming one, is it just a solicitors drawn up document or is there more to it?

    Finally, regarding VAT and tax, what changes do I have to make for myself personally and for the business? Am I right in saying I declaring earnings from the partnership as income, and do it online with Revenue as part of PAYE etc?

    Many Thanks!

    Morning,
    I would totally agree with previous poster and from my own experience partnerships can be a complete nightmare. Where money, business and friendships are in a partnership arrangement that will leave you potentially open to many and varied issues.

    Take the scenario: Sometime down the line and the business is making/not money and one or other partner is not happy for whatever reason. They can simply walk with half or more of the business overnight.

    The previous suggestion of a contracting role for one partner in the short/medium term is a v-good one. If when the business takes off you'll have the measure of each other. If happy at that point then go down the Ltd route with a tight shareholders agreement to protect the business and the shareholders.

    Speak with good accountant for advice on your options.

    Best of luck.


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