A partnership is a business owned by two or more partners. Each partner shares ownership, management, and profits of the business equally unless otherwise specified in the Deed of Partnership. The Deed of Partnership establishes how profits and losses are shared, money contributed by each partner, partner pay, responsibilities, procedures for adding or removing partners, and dissolving the partnership. Partnerships allow for shared workload and decision making but partners have unlimited liability for each other's debts.

1. 1.
PARTNERSHIPS
To define what is meant by a business partnership.
To understand who owns, manages and shares the
profits in a business partnership.
To investigate a Deed of Partnership.

2. PARTNERSHIPS
A group of people (often with similar interests)
who come together to share the workload and
responsibility of running a business.
Minimum 2 – Maximum 20
Lawyers Architects Accountants
Any Others??

3. A shared
workload
Shared
decision
making
Shared
ownership
Share
profit
Shared
liability for
debts

4. Each partner is responsible for the entire debt of the
partnership, so if one partner makes a bad decision then it
has to be met by all of the partners.
UNLIMITED LIABILITY
PARTNERSHIPS

5. OWNERSHIP & MANAGEMENT
Equal
Ownership
Equal
Management
Equal
Share in
Profits
Unless stated in the “Deed of Partnership”; Partnerships have

6. •Why Partnerships?
•The main reason is usually to expand the business by an increase in capital or to
gain specialist skills that are required for the business to develop
•Who owns a partnership?
•The business is owned by the partners equally e.g. if there are 3 partners then
they will each own a third of the business, this is the case unless stated
otherwise in the deed of partnership.
•Who manages the business?
•The partners share the control of the business equally unless the partnership
agreement states otherwise. In many partnerships each partner may run a
separate department.
PARTNERSHIPS

7. SETTING UP A PARTNERSHIP
Deed of
Partnership
•How profits and losses are to be shared.
•How much money each partner has put into the business
•How much each partner gets paid – “salary.”
•The working arrangements of the partnership e.g. who has
responsibility for which part of the business
•Arrangements for removing a partner or adding a partner to a
business.
•Arrangements for ending the partnership and the dividing up the
assets once the partnership is dissolved.

8. DEED OF PARTNERSHIP
•This legal Partnership is between:
•The name of the Business will be:
•The Business activities are:
•Each Partner agrees to provide the sum of: £
•The duties of the partners will be as follows:
•The bank account will be in the name(s) of:
•Profits will be shared out:
•Wages paid will be:
•Regular Meetings:
•Overall Decisions on business:
•Leaving the Partnership:
•Signed: x Dated: x
•Witnessed: x

9. •Easy to set up.
•Business can gain professional help through taking
on a qualified partner.
•New Partners - New Ideas
•Extra partners bring extra capital
•Responsibility for running the business (both
decision making and workload) is shared
•Finances are kept private
•Division of labour leads to greater expertise
ADVANTAGES OF FORMING A PARTNERSHIP

10. •Unlimited liability for the debts of the
business
•Finance still limited
•Lack of continuity
•No consultation required (Deeds of
Partnership are only recommended)
•Decision making more complex
DIS ADVANTAGES OF FORMING A PARTNERSHIP