Partnerships are a common form of business arrangement, owing to the relative simplicity of establishing a partnership. This is an unincorporated form of association in that liability of the partners is not limited by reference to the amount of the partners’ investment in the business,
A partnership involves a group of two or more individuals agreeing to share the assets and liabilities of the jointly-owned business.
General Partnerships in Gibraltar
In Gibraltar, this type of partnership is referred to as a General Partnership. Additional licensing, e.g., a business license, may also be required depending on the nature of the business. Unlike other forms of business arrangements, a General Partnership does not enjoy separate legal personality and is ‘see-through’ for tax and liability purposes.
The relatively simplistic nature of General Partnerships makes it a common form of ‘incorporation’ for first-time entrepreneurs and in situations where, for example, a group of friends or family members may resolve to enter into business together.
Importance of legal advice on establishing Partnership
It is, however, especially important in the context of partnerships that agreements are settled early on in respect of the mechanisms which will apply in the context of dispute resolution and the payment of the partnership’s debt. The often personal nature of the relationship between partners renders it very important indeed that all elements of the operation of a business are captured in a considered and thorough partnership agreement that all parties can rely upon in the event of financial difficulty or, indeed, the context of business partners falling out.
This is why it’s critical to get sound legal advice before embarking on any such venture to ensure your business, and your own personal finances, are protected should any difficult circumstances arise.
Business registration of a Partnership
Registration with the Registry of Business Names is a requirement that applies to all entities trading as either an incorporated or unincorporated business entity. As such, Partnerships must register their Business Name within 14 days of commencement of business.
Taxation of Partnerships
Where Partnerships are engaged in commercial activity such as a trade, business or in the provision of a professional service, it will be treated as transparent for the purposes of taxation. The effect of this is that individual partners will be taxed on their share of assessable income arising from the activities of the partnership.
The Best Choice for Your Business
For over 80 years Hassans has been trusted by generations of businesses, both large and small, to guide, nurture and advise them through often difficult times. We can help you navigate all the paperwork, including partnership agreements, and mediate disputes to ensure, as much as possible, the best outcomes.
Starting a new business is one of the most exciting and rewarding ventures on which you can embark. Therefore, you deserve to have the peace of mind which comes from knowing you have Gibraltar’s leading experts in your corner to advise you. So, before you take the plunge, contact Hassans today.
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