Summary
Summary Partnership consolidation LPC exam notes
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- Institution
This is a consolidation document which is intended to give an outline of Partnerships in the context of the BLP course,
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PartnershipsSole Trader-
are unincorporated and thus have very few formal steps but must be registered with HMRC for tax
purposes. ST earn all of the money from their services alone, but they may employ people and remain
as a ST so long as they own the business entirely.
a Has the right to make all decisions affecting the business
b owns all of the assets of the business
c Is responsible for paying income tax on all profits of the business
d Has unlimited liability for all debts of the business
, Partnership (PA Act 1890)
s.1- definition of partnership Persons carrying on business in common with a
view of making a profit
Identifying a partnership: Ittoll v Williams- conducting business in
Criteria in s.1 PA 1890 common is an indication of partnership existing,
S.2 provides the ‘badges of a look at how collaborative that is
partnership’
s.2- rules determining the existence of a
partnership
(1) JT, TIC, joint property or common
property does not in itself create the
existence of a partnership
(2) The sharing of gross returns does
not create a partnership in itself
(3) The receipt of a share of the profits
of a business is prima facie
evidence that he is a partner
not liable as partner if:
Person receiving profits for debts
Servant or agent of the person in
business
Person who is the widow, wife, CP
or child of decease partner
The advance of money by way of
loan to a person engaged or about
to engage in any business on a
contract with that person that the
lender shall receive a rate of interest
varying with the profits, or shall
receive a share of the profits arising
from carrying on the business, does
not of itself make the lender a
partner with the person or persons
carrying on the business or liable as
such. Provided that the contract is in
writing, and signed by or on behalf
of all the parties thereto:
A person receiving by way of
annuity or otherwise a portion of the
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