Set up a business partnership

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1. Setting up

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

Partners share the business鈥檚 profits, and each partner pays tax on their share.

A partner does not have to be an actual person. For example, a limited company counts as a 鈥榣egal person鈥� and can also be a partner.

What you need to do

When you set up a business partnership you need to:

The 鈥榥ominated partner鈥� is responsible for managing the partnership鈥檚 tax returns and keeping business records.

There are different rules for limited partnerships and limited liability partnerships (LLPs).

2. Naming your partnership

You can trade under your own names, or you can choose another name for your business. You do not need to register your name.

You must include all the partners鈥� names and the business name (if you have one) on official paperwork, for example invoices and letters.

Business names

Business partnership names must not:

  • include 鈥榣imited鈥�, 鈥楲td鈥�, 鈥榣imited liability partnership, 鈥楲LP鈥�, 鈥榩ublic limited company鈥� or 鈥榩lc鈥�
  • be offensive
  • be the same as an existing trade mark

Your name also cannot contain a 鈥榮ensitive鈥� word or expression, or suggest a connection with government or local authorities, unless you get permission.

Example

To use 鈥楢ccredited鈥� in your company鈥檚 name, you need permission from the Department for Business and Trade (DBT).

Check which words you need permission to use, and who from.

You鈥檒l need to register your name as a trade mark if you want to stop people from trading under your business name.

3. Register the partnership

You must register your partnership for Self Assessment with HM Revenue and Customs (HMRC) if you鈥檙e the 鈥榥ominated partner鈥�. This means you鈥檙e responsible for sending the partnership tax return.

The other partners need to register separately.

All partners also need to send their own tax returns as individuals.

You must register by 5 October in your business鈥檚 second tax year, or you could be charged a penalty.

Example

If you started a partnership or became a partner during the 2024 to 2025 tax year, you must register before 5 October 2025.

Other ways to register

You can also register the partnership using form SA400 if you cannot register online. You can register as a partner using form SA401.

Registering for VAT

You must also register for VAT if your VAT taxable turnover is more than 拢90,000. You can choose to register if it鈥檚 below this, for example to reclaim VAT on business supplies.

You can appoint an agent to deal with HMRC on your behalf.

After you鈥檝e registered

You鈥檒l need to keep records so you鈥檙e able to fill in:听听听

The nominated partner should complete the partnership return as soon as possible, so the other partners are able to use this information to complete their individual Self Assessment tax return. Find out how to get help with your tax return.听

You can send your return any time after 5 April to the filing deadline.听听

If you send the partnership return late, each individual in the partnership will have to pay a penalty.

You must then pay your Self Assessment tax bill by 31 January. Find out how to prepare for your bill.