Forming a partnership info?

MidlandsM

Hi,

Can anyone point me in the right direction for details info on the legal stuff on forming a partnership.........specifically the main difference to going "limited co"....

does a partnership have to file company returns etc for all to see?

Peterdalkey

There is not much difference between a partnership and a ltd co with a proper shareholders agreement in place. Both specify the terms of engagement, profit share, and most importantly, terms of disengagement exit mechanisms/protocols. Certain activities precluded the use of ltd companies, solicitors and accountancy practices, I think. The big issue with unlimited partnerships is joint and several liability of all the partners for all liabilities.

MidlandsM

Thanks Peter,

but does it have to make CRO returns, like a limited co?

Peterdalkey

You will no doubt get a definitive answer from mod dbran, but I am pretty sure you do not make any corporate returns but rather make your tax returns based on your individual self employed tax returns as per sole traders etc. There is no CRO filing involved.

Axwell

As per peters post you dont file documents with the CRO such as annual returns etc. You need to register initially with the CRO to file the business name as a partnership and then you are treated as individuals when it comes to tax returns and must file your own under your own PPS number.

The main difference between a partnership and a Limited company is with a partnership you are going to be liable for any debts etc the business may have. With a limited company you arent held personally liable.

More info available here

http://www.citizensinformation.ie/en/employment/types_of_employment/self_employment/setting_up_a_business_in_ireland.html

MidlandsM

Perfect, just the info i needed. Thank you

dbran

Hi

I think you have most of your answers here already.

However, partnerships should be avoided at all costs. Each partner is jointly and severally liable for all the debts of the partnership.

There have been cases where one of the partners runs up huge debts in the name of the partnership and disappears out of the jurisdiction (to go bankrupt). The remaining partner is then left liable for everything.

Companies are much safer and should always be used where there are two or more people involved.

dbran

MidlandsM

dbran wrote: »

Hi

I think you have most of your answers here already.

However, partnerships should be avoided at all costs. Each partner is jointly and severally liable for all the debts of the partnership.

There have been cases where one of the partners runs up huge debts in the name of the partnership and disappears out of the jurisdiction (to go bankrupt). The remaining partner is then left liable for everything.

Companies are much safer and should always be used where there are two or more people involved.

dbran

good cautionary advice there, thanks again

lakill Farm

dbran wrote: »

Hi

I think you have most of your answers here already.

However, partnerships should be avoided at all costs. Each partner is jointly and severally liable for all the debts of the partnership.

There have been cases where one of the partners runs up huge debts in the name of the partnership and disappears out of the jurisdiction (to go bankrupt). The remaining partner is then left liable for everything.

Companies are much safer and should always be used where there are two or more people involved.

dbran

I really have to agree with this. THe little extra expense of the Ltd company is well worth it.

dublinsoon

Definitely agree with dbran:

In a partnership you are liable for all of the debts of the partnership, including those incurred by your partners, for instance if there's a claim for negligently done work or an accident, etc.; with a limited company you are only liable for those debts of the company you have personally guaranteed. (Still make sure to talk to a solicitor about a shareholders agreement, especially in relation to how you will deal with specific personal guarantees.)

Other advantage of a limited company is that everyone is clear as to the % of the company that each person owns and shares in the business can be more easily sold or transferred.