A Partnership unless a Limited Liability Partnership (LLP) or a Limited Partnership (LP) is registered only with HMRC. These partnerships are generally referred to as “Ordinary Partnership” or “General Partnership”. There is no legal requirement to prepare the partnership accounts. However, the partnership still needs to prepare and file a partnership tax return with HMRC. So, it is in the best practice to prepare the partnership accounts to prepare the partnership tax return, and for the transparency of financial transactions and positions between partners.
What is a Partnership?
The partnership Act 1890 states that a partnership is “the relation which subsists between persons carrying on business in common with a view of profit.” Therefore, mere joint ownership of the property does not create a partnership – something more is required for the letting to constitute a partnership.
It would be best if you established all the facts to determine the true relationship between the parties to identify whether a partnership exists or not.
Under English law, a partnership is not a separate legal entity. Partners act as agents for each other in respect of the business transactions and each partner is bound by the acts of the others.
What do the Partnership Accounts include?
The partnership’s accounts usually include the following statements:
- Statement of Financial Position (or Balance Sheet), which shows the value of assets, liabilities, and equity of the company
- Statement of Income and Expenses, which shows the company’s income and expenses for the financial period
- Notes to the Accounts, which provide further details on the accounts
- Member’s report
However, as there is no legal requirement to file the partnership accounts, partners may choose only to produce some statements, and therefore, many choose to produce only the profit and loss account.
How Will we help you with your Partnership Accounts?
As a firm of chartered certified accountants, we provide an expert service in preparing the accounts for your partnership. Unlike ordinary accountants, we understand the specific accounting issues faced by the property sector. Therefore, we can assure you that the whole process will be hassle-free.
Are you in a property partnership business and looking to incorporate into a limited company without paying the CGT and SDLT with tax reliefs? We understand and can implement the whole process. Therefore, it is imperative to get your partnership accounts prepared by specialists like us instead of other ordinary accountants.
