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Law Society of Scotland

Partnership & Limited Companies

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Complete our online enquiry form here, email us [email protected] or telephone your nearest office to get an immediate response and advice on Partnership and Limited Companies.

You can also read our helpful guide below for more information.

Whether a client is starting out in business for him or herself, it is fundamental to decide the best constitution of the venture. Some people assume that a one-man/woman business is too small to merit a limited company being floated to own it. Not so.

There are plenty of reasons why the corporate structure is ideal for single person enterprise – tax, security of assets, expansion potential and others. For example, if the limited company gets into a legal dispute or owes money, you as an individual have no liability at all. Partnership ( i.e. a formal written agreement) may be appropriate if there are two or several people getting together to work – it regulates the relationship between partners in terms of their shares of profit ( or loss…), inputs of capital and areas of responsibility. And crucially it sets out a definite and binding procedure if one partner wants to leave or the other want him or her to leave. Partnership brings joint and several liability.

This means that if you are in a partnership and your partner misbehaves, you may share liability with him or her. Partners have a personal liability to their lenders, customers and suppliers. So if something goes wrong, they may be sued and their own assets and property may ultimately be at risk. So again, consideration should always be given to operating the business as a limited company. But even if this structure is used, if the firm needs to borrow substantial funds or has a high overdraft running, the bank may require personal guarantees from directors as well as a floating charge over the company’s assets. Where a limited company leases commercial premises, the landlord may ask for personal guarantees from directors if afraid the company is not strong enough or well-enough established to be a safe bet for the landlord over the term of the lease.

Contact our Business Solicitors for Partnership Advice Today in Glasgow, East Kilbride & Hamilton, Scotland

Based in Glasgow, East Kilbride and Hamilton in Scotland, our business lawyers can help you provide the partnership legal advice you need and a range of other business law services. Please complete our online enquiry form here, email us [email protected] or telephone your nearest office to get an immediate response and advice.

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