PARTNERSHIP

Like being a sole trader you trade personally and partnership does have similar tax advantages and disadvantages. There is slightly more paperwork involved; the preparation of partnership accounts is more complex than accounts for a sole trader. There is however one considerable disadvantage that is unique to partnership.

Under the principle of joint and several liability you are liable for the actions and debts of your partners and vice versa. For instance if a partner was to perform some work for a client negligently then the client would not sue the partner but the partnership as a whole - including you. Because of this disadvantage partnerships are rare outside of the traditional professions such as the law, accountancy, architecture and engineering.