Q&A - What is a partnership?

A partnership is formed where a business is started and owned by more than one person.

In each case, a legal document called a Partnership Agreement sets out how the partnership is run, covering areas such as:

• How profits are to be shared
• What the partners have to invest into the business
• How decisions are taken
• What happens if a partner wants to leave or dies

The partners between them own all the business assets and owe all business liabilities.  Partners, therefore, also have unlimited liability.

However, there is now a fairly new form of partnership in which the partnership is treated as a separate legal entity with its own assets and liabilities. This is known as the limited liability partnership (“LLP”). 

Like a company, the LLP is registered at Companies House and must file accounts.  The partners continue to control and own the business – but the crucial different is that they are protected by limited liability.

Advising on Legal Structure - Role Play [13 Feb 2012]
Unlimited vs Limited Liability? Box it off [4 Jan 2012]
Revision Quiz - Legal Structure Basics [15 Oct 2011]
Revision Quiz - Sole Traders and Partnerships [15 Oct 2011]
400,000 British Businesses Disappear - Overnight [24 May 2011]
BUSS1 Revision Quiz - Choosing a Legal Structure [15 Dec 2010]
The pitfalls of setting up a partnership [2 Nov 2010]
Customer Service - What Students Can Learn from John Lewis Partnership [12 Jun 2010]
Revision Presentation - Startup Business Structures [29 Dec 2009]
Q&A - Compare the advantages of trading as a sole trader versus a private limited company [1 May 2009]
Q&A - What is unlimited liability? [1 May 2009]
Q&A - What is a sole trader? [1 May 2009]
A Great Example of Sources of Finance for a Partnership [9 Jan 2009]
When the partnership structure doesnt work well for a start-up [26 Jul 2008]
John Lewis staff bag a bumper bonus [7 Mar 2008]

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