My Wife has been self-employed for a few years now with two of her close friends (mortgage advisors), they are contemplating setting up a "Partnership" for ease as currently they are just taking all the cash each month split 3 ways and would like to set up a business bank account etc.
They have spoken to a solicitor and have been quoted £3k to set one up, this seems VERY expensive to me, does anyone have any experience with this and can comment?
Cheers
Why a partnership? A limited company is cheaper, offers a degree of protection in respect of personal liability and would seem to meet the need.
It can be set up by an accountant, and can cost surprisingly little. A bigger cost, annually, will be professional indemnity insurance.
There's no real cost to it if they just register a limited company with 3 directors. If all 3 of them are equal partners I don't see why a solicitor needs to be involved. My accountant has set-up 3 on my behalf.
Barclays business accounts are free to set-up with charges applied after 12 months.
I suggested Ltd but they have been advised (by their accountant) that a partnership is more suited for them (could this be due to being in the financial sector?).
I don't understand that advice at all; it's just professional services, unless IFAs (which I assume they'd be) have specific requirements. A limited company should be ideal.Originally Posted by gilford
(Just did a lightning Google, and even The Mortgage Advice Partnership is actually the Mortgage Advice Partnership Ltd.)
Limited Liability Partnership is possibly the most tax efficient vehicle.
No tax for the entity to pay & of course no Employers NI.
Can't help with the set up cost though.
Andy
Wanted - Damasko DC57
Yes, it's that exactly!
Still can't see where the £3k cost is needed though? My accountant set up a Ltd company for me a few years ago for £150, is a Partnership a lot more detailed hence more time and cost to do?
They seem happy to pay it but I just feel the cost is very high for something that (from what I can see) can be done yourself?
A quick google search suggests LLP registration should cost only a few quid.
https://www.google.com/search?q=llp+...hrome&ie=UTF-8
Plenty of cheap / free help re the Partnership Agreement too
https://www.google.com/search?rlz=1C...iz.P3uqIkhWcgw
Andy
Wanted - Damasko DC57
The costs quoted will be to draft a bespoke partnership agreement for them.
Anyone carrying on business with another (or others) with a view to making profit is already in a partnership. Without a partnership agreement though they are subject to the provisions of the Partnership Act 1890.
For some that’’s fine. For others not so much so.
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people on here are mentioning costs of set up - yes that can be dirt cheap
I suspect the £3k (whether Partnership or Limited Company) will be for a full-blown Partnership Agreement or Shareholders Agreement. If it is 3 "friends" then such an agreement will deal with fall outs, drag along, bad-leaver/good-leaver provisions.
But they will want to save money and "never fall out" so won't bother. If there are issues in years to come the litigation lawyers will make up for the savings !
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