Basic Information on UK Partnership

Some of us are not aware that there are actually a few different types of partners in a partnership. Each of them needs to carry their responsibilities to ensure a smooth running business.A partnership is basically a flexible way of two or more people to run a business together. This structure is not suitable for non-profit making companies as well as social enterprises. If a partner is under 18 years old, he will not be bound by the terms of the agreement. Other companies can become a member of partnership too.

UK partnership should not be compared to a limited company. This is because the members of the partnership do not have financial protection and they have to work as a whole if any debt incurs. Problems and difficulties may arise if disputes were to happen between the partners. The partnership might have to be dissolved if either one of its member wished to resign or died.The members of a partnership usually share the responsibility in running the business disregard whether it is making profit or losses. However, their rights as well as responsibilities are determined by the type of partner and partnership agreement. There are basically three types of partners where each of them plays a different role and responsibilities.

General partners are the one that make investment into the business, running it and has a share in its profit. General partners are fully liable of the debts incurred. They are the one who suffer the most losses if the business is not doing well. Each partnership is required to have at least one general partner.Sleeping partners are those who invest money and have a share in its profits. However, they do not take part in running the business. They too are fully liable on any debts incurred.

Officers of a partnership can be taken by the companies. If the companies are the officers, then they have the responsibilities just like the other partners as well. But companies have tax matters and reporting obligations.
The three types of partners as mentioned above exist in UK partnership. Each has an important role in running the profit-making business.