Set up a business partnership
How to set up a limited partnership, choose a business name, appoint partners and register with Companies House
A business partnership is created when two or more people decide to go into business together.
There are three types of business partnership:
- 'ordinary' partnerships
- limited partnerships
- limited liability partnerships (LLPs)
This guide outlines how to set up a business partnership, including choosing a name for your partnership, partner responsibilities and registering your partnership.
Setting up a business partnership
Learn how to set up a business partnership, choose a nominated partner, and manage tax responsibilities.
In a partnership, you and your partner (or partners) personally share responsibility for your business. This includes:
- any losses your business makes
- bills for things you buy for your business, like stock or equipment
- sharing the business profits, with each partner paying tax on their share
A partner doesn't have to be a person. For example, a limited company can also be a partner because it’s a ‘legal person’ - see set up a limited company.
How to set up a partnership
To set up a business partnership, you need to:
- choose a name
- choose a 'nominated partner'
- register with HM Revenue and Customs (HMRC)
Business partnership tax responsibilities
Each partner is responsible for paying tax on their share of the business's profits. The 'nominated partner' is in charge of handling the partnership's tax returns and keeping business records.
Differences between limited partnerships and LLPs
There are different rules for limited partnerships and limited liability partnerships (LLPs):
- limited partnerships - at least one partner has unlimited liability, while the other partners have limited liability.
- limited liability partnerships (LLPs) - all partners are protected from personal losses beyond their investment in the business.
See GOV.UK guidance on and .
Naming your business partnership
What you can and cannot name your business partnership in the UK, including words you need permission to use
You can trade under your own names, or you can choose another name for your business. You don't need to register your name.
You must include all the partners' names and the business name (if you have one) on official paperwork, for example invoices and letters.
Rules for business partnership names
Business partnership names must not:
- include 'limited', 'Ltd', 'limited liability partnership, 'LLP', 'public limited company' or 'plc'
- be offensive
- be the same as an existing trade mark - see company name and trade mark checker
Your name also can't contain a 'sensitive' word or expression, or suggest a connection with government or local authorities, unless you get permission. For example, to use 'Accredited' in your company's name, you need permission from the Department for Business, Energy and Industrial Strategy (BEIS).
GOV.UK outlines which .
Protecting your business name
You'll need to register your name as a trade mark if you want to stop people from trading under your business name.
Register your business partnership
How to register a business partnership online, via post or by appointing someone else to deal with HMRC on your behalf
You must register your partnership for Self Assessment with HM Revenue and Customs (HMRC) if you're the 'nominated partner'. This means you're responsible for sending the partnership tax return.
The other partners need to register separately.
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All partners also need to send their own tax returns as individuals - GOV.UK has further information on .
HMRC registration deadlines for partnerships
You must register by 5 October in your business's second tax year, or you could be charged a penalty. For example, if you started a partnership or became a partner during the 2021 to 2022 tax year, you must register before 5 October 2022.
Other ways to register your partnership
You can also register the partnership using HMRC if you can't register online. You can register as a partner using .
Registering for VAT
You must also with if your VAT taxable turnover is more than £90,000. You can choose to register if it's below this, for example to reclaim VAT on business supplies.
Another option is to appoint an agent to deal with HMRC on your behalf - GOV.UK provides guidance on what you need to do to .
Checklist: set up a business partnership
A handy checklist of steps you must take when you are initially setting up your business partnership
To set up your business partnership properly, there are a few key questions to consider. Keep in mind that as your business develops, new legal and tax requirements may arise.
How do I register my business partnership for self assessment with HMRC?
To set up your tax and National Insurance records, you must register your partnership for Self Assessment with HM Revenue & Customs (HMRC). If your partnership is a limited liability partnership (LLP), both the business and the individual partners must be registered - see understanding Self Assessment and your tax return.
Do I need to register my LLP with Companies House?
If your business partnership is an LLP, you must register your business with Companies House - see starting a company or partnership.
Do I need planning permission for my business?
Obtain any planning permission that you may need from your local council - find your local council in Northern Ireland.
What licenses or permits do I need for my business?
Your business may require specific licenses or permits to operate legally. Use the licence finder tool to find out what licences or permits your business may require.
Do I need to pay business rates, and how do I check?
Contact the Land and Property Services to find out whether you need to pay business rates - see business rates: the basics.
Do I need to register for VAT for my business?
If your business expects an annual turnover of more than £85,000, you are required to register for VAT with HMRC. If your turnover is below this, you can still choose to register voluntarily - see registering for VAT.
How do I register for PAYE if I have employees?
If your partnership has employees, you must register for Pay As You Earn (PAYE) with HMRC - see registering and getting started with PAYE.
How do I register for the construction industry scheme (CIS)?
If you're a contractor or subcontractor in the construction industry, you must register for the Construction Industry Scheme (CIS) with HMRC - see contractors and the Construction Industry Scheme.
How do I set up a financial record-keeping system for my business?
It’s essential to have a financial record-keeping system to manage your business finances - see set up a basic record-keeping system.
Where should I include my business name on stationery?
Make sure your business name appears on all official business stationery, including letters, invoices, receipts, and cheques - see name your business.
How do I set payment terms with customers?
Set clear terms and conditions for your customers, including specific invoice payment deadlines - see ensure customers pay you on time.
What business insurance do I need, and how do I get it?
Ensure all business insurance requirements are in place - see business insurance: the basics.