Sandison Easson Specialist Accountants Federation of Independent Practioner Organisations

Consultant Chambers


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By definition a Partnership is the coming together of two, or more individuals for their common good.

In a partnership income and expenses are shared on an agreed basis.

Partners within a Partnership share a common goal or objective and generally provide a high level of commitment to their other partners.

It is preferable that a Deed of Partnership is drawn up setting out the basis upon which the individual partners have come together as a group. The Partnership Act 1890 sets out a model agreement to cover any deficiencies in the agreed Deed.

The BMA has a draft Partnership agreement for General Practitioners, which could be used as the basis for a Partnership between consultants.

The Partnership for tax purposes requires a separate set of accounts to be prepared and a separate tax return to be submitted to the Revenue. The financial year-end may not be the same for partner who has retained some private practice income outside of the Partnership.

The Partnership earnings are private and need only be disclosed to the Revenue.

Limited Liability Partnership

A new form of trading entity that became possible in 2001.In essence it is a hybrid between a Partnership and a Limited Company.

A Limited Liability Partnership is taxed in the same way as an ordinary Partnership and with regard to profit sharing and any commercial arrangements is the same as an
ordinary Partnership.

The major difference is that unlike an ordinary Partnership an individual partner’s liability is not unlimited. In a Limited Liability Partnership a partner’s liability is limited to his/hers investment.

This is very similar to a Limited Company where a shareholder liability is limited to the nominal value of his/her shareholding.

In addition, a Limited Liability Partnership, as for a Limited Company, is required to disclose to the public financial information.

It is unlikely that consultants would need a Limited Liability Partnership, as the Defence bodies require individuals rather than organisations to carry cover.

The Limited Liability Partnerships came into existence simply because accountants and other professionals were being sued and a Limited Company for a variety of reasons could not be considered even though the liability was limited to the nominal value of shareholdings.

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