Read the text below and answer Questions 20-27.
Setting up a business partnership in the UK
Two or more people can go into business together by setting up either a limited company or a partnership.A partnership is the easier way to get started,and simply links two or more people together in a simple business structure.Unlike a limited company, a partnership doesn’t have a separate legal status.The partners are usually self-employed individuals,although a limited company counts as a ‘legal person’ and can also be a partner.
In a partnership, you and your partner or partners personally share responsibility for your business. This means, among other things, that if your business cannot afford to pay its debts, you must pay them yourselves. Again, this is not the case with a limited company. Partners share the business’s profits, and each partner pays tax on their share.
When you set up a business partnership you need to choose a name. You can trade under your own names, for example, ‘Smith and Jones’, or you can choose another name for your business. You don’t need to register your name. However, you should register your name as a trademark if you want to stop people from trading under your business name.
Business partnership names must not include ‘limited’, ‘Ltd’, ‘limited liability partnership’, LLP’, ‘public limited company’ or ‘pic’, be offensive, or be the same as an existing trademark. Your name also can’t suggest a connection with government or local authorities, unless you get permission. There is no central database of partnership names in the UK, so to avoid using the same name as another business, it is advisable to search on the internet for the name you are considering.
You must include all the partners’ names and the business name (if you have one) on official paperwork, for example invoices.
You must choose a ‘nominated partner’ who is responsible for registering your partnership with HM Revenue and Customs (HMRC),the government department responsible for the collection of taxes.This person is responsible for managing the partnership’s tax returns and keeping business records.Alternatively,you can appoint an agent to deal with HMRC on your behalf.
All partners need to register with HMRC separately and send their own tax returns as individuals.
You must register by 5 October in your business’s second tax year, or you could be charged a penalty.
You must also register for VAT if your VAT taxable turnover is more than £85,000. You can choose to register if it’s below this, for example to reclaim VAT on business supplies.
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Complete the sentences below.
Choose ONE WORD ONLY from the text for each answer.
Write your answers in boxes 20–27 on your answer sheet.
A partnership is different from a limited company in not having its own as a legal body.
The partners are personally responsible for paying all the partnership’s
The partnership’s are divided between the partners.
Registering the partnership’s name prevents others from using that name when
The best way to find out if a name is already in use is to use the
The names of the partners and the partnership must appear on and other documents.
You must have a nominated partner, or someone to act as your ,for all contact with HMRC.
You will have to pay a if you miss the deadline for registering the partnership.