If for any reason the number of designated members falls to one, every member is deemed to be a designated member.
A partner's liability is limited to the amount of money they have invested in the business and to any personal guarantees they have given to raise finance. This means that members have some protection if the business runs into trouble.
Limited Partnerships
A limited partnership is made up of a mixture of ordinary partners and limited partners.
Ordinary partners are jointly liable for any debts owed by the partnership and so are equally responsible for paying off the whole debt.
A limited partner's liability is limited to the amount of money they have invested in the business and to any personal guarantees they have given to raise finance.
Responsibilities
If the partnership has debts, the partners are jointly liable for any amounts owed and so are equally responsible for paying off the whole debt.
If a partner leaves the partnership, the remaining partners may be liable for the entire debt of the partnership. Therefore, partners do not enjoy any protection if the business fails.
Features in common
The profits and gains of the partnership are shared among the partners, unless the partnership agreement states otherwise
Each partner is personally responsible for paying tax on their share of the profits and gains, and for their National Insurance contributions.
The partnership must keep records showing business income and expenses.
A partner can be an individual or another business, eg a limited company or another partnership.
The partners themselves usually manage the business, although they can delegate certain responsibilities to employees.
Sole Trader
A sole trader is a person who sets up and owns their own business.
What is a sole trader?
A sole trader is a person who sets up and owns their own business. They may decide to employ other people but they are the only owner. A sole trader has unlimited liability‘
As a sole trader, your business is owned entirely by you, grown by you and ultimately succeeds or fails by you. This also means you are entitled to all profit that the business makes.
Responsibilities’ of sole trader
Responsibility as a Sole Trader is to submit a Personal Tax Return each year.
You want to ensure that you submit this Personal Tax Return, and make the appropriate payment of income tax on time.
Keeping organised books.
Liability
As a sole trader, you are personally responsible for any debts run up by your business. This means your home or other assets may be at risk if your business runs into trouble.
Disadvantages & Advantages
The main disadvantage is that you, as the owner of the business, are solely liable for any consequences of business failure or any other liability for example injuring a customer or property damage.
The advantages of being a sole trader are immense not lease because the owner has full control over the business for daily operations as well as how large they wish to grow it.
by
agaata5 (student)
