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
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
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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