{"id":3312,"date":"2025-08-15T06:00:00","date_gmt":"2025-08-15T06:00:00","guid":{"rendered":"https:\/\/www.mintformations.co.uk\/blog\/?p=3312"},"modified":"2025-08-26T13:59:48","modified_gmt":"2025-08-26T13:59:48","slug":"guide-to-forming-business-partnership","status":"publish","type":"post","link":"https:\/\/www.mintformations.co.uk\/blog\/guide-to-forming-business-partnership\/","title":{"rendered":"A complete guide to forming a business partnership"},"content":{"rendered":"

If you\u2019re considering forming a business, you probably have a <\/span>lot <\/span><\/i>on your to-do list. You\u2019ve got to make sure your business idea is concrete, create a solid business plan and come up with a memorable name. Luckily, if you\u2019re considering starting a business with someone else, you won\u2019t have to do it all alone.\u00a0<\/span><\/p>\n

Your business structure is one of the first things you\u2019ll need to work out together. Naturally, you might be inclined to choose a partnership structure, but the UK has three main business structures. Sole traders are the most popular structure, with 56% of UK businesses being sole proprietorships and limited companies not too far behind with 37%. Surprisingly, business partnerships only make up <\/span>7% of UK businesses<\/span><\/a>.\u00a0<\/span><\/p>\n

Each structure has distinct advantages and disadvantages, and it can be tricky to determine which is right for your business. Luckily for you, <\/span>Mint Formations<\/span><\/a> have got you covered.\u00a0<\/span><\/p>\n

We\u2019ve compiled this complete guide to business partnerships so you can decide if it\u2019s the best option. It has everything you need to know, including an overview of business partnerships, different types of partnerships and their pros and cons. Plus, we\u2019ve included a step-by-step guide on how to <\/span>set up a business partnership<\/span><\/a>.\u00a0<\/span><\/p>\n

Ready to get stuck in?\u00a0<\/span><\/p>\n

What is a business partnership?<\/h2>\n

\"2<\/p>\n

Put simply, a business partnership in the UK is a legal business structure where two or more people set up a business and run it together. Usually, each partner will invest money, contribute industry knowledge and skills, as well as share the business\u2019 profits and losses.\u00a0<\/span><\/p>\n

Partnerships are often formed to combine skill sets and resources to bring a business idea to life. By combining experience and expertise, partners can build a business that is stronger than if they started alone.\u00a0<\/span><\/p>\n

Types of business partnership<\/h2>\n

There are three <\/span>types of business partnerships<\/span><\/a> in the UK, general, limited and limited liability partnerships. Here\u2019s a quick overview of each of them:\u00a0<\/span><\/p>\n

General partnership<\/span><\/h3>\n

A general or ordinary partnership is the most common form of partnership, where two or more partners come together to form and run a business. Generally, each partner shares responsibility for the management and finances of the business and shares profits and losses equally unless the partnership agreement states otherwise.\u00a0<\/span><\/p>\n

In a general partnership, each partner has unlimited personal liability for any business debts or obligations. This means that if the business cannot pay its debts or is sued by a customer, the partners\u2019 personal assets can be used for payment. A general partnership is not a separate legal entity, meaning each partner must pay income tax and National Insurance contributions individually through HMRC\u2019s self-assessment tax.\u00a0<\/span><\/p>\n

Limited partnership (LP)<\/h3>\n

Limited partnerships work similarly to general partnerships but give some partners more protection in terms of liability. In a limited partnership, there are two types of partners, general partners and limited partners, which have the following distinctions:<\/span><\/p>\n