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Scottish Partnership

A partnership is a business relationship that exists between two or more legal persons (this includes a limited company) carrying on a business in common with a view to profit.

Partnerships can be created orally but it is preferable for a Partnership Agreement to be prepared. This will set out how the partnership is to work, the rights and obligations of each partner and the division of the business profits. Provided that all the partners consent, the agreement can be changed at any time.

In Scotland the partnership (or firm) is a legal personality distinct from the persons who are the partners.


  • The profit after expenses is all yours
  • You are responsible for your own income tax
  • The partnership is a separate legal person and can be sued in its own right.
  • The reporting requirements are less onerous than those for a Limited Company


  • You are responsible for your share of all business losses
  • You can still be liable for partnership debts
  • The partnership property, for example land and buildings, is owned by all the partners jointly

Start Up

Choose a Nominated Partner, who is responsible for

  • keeping business records and managing tax returns.
  • Registering the firm for partnership
  • Registering the firm for VAT if sales in the year are anticipated to be more than the prevailing threshold (refer to Some Information page for current registration level)
  • Registering with HMRC as an employer, if you intend to employ staff
  • Each partner must register with HMRC for self employment and Class 2 NIC as soon as practicable after starting your business. Late registration can result in a penalty charge.

We will attend to all these registrations for you, leaving you free to concentrate on running your business.


The Nominated Partner must

  • submit a Partnership Self Assessment tax return every year
  • submit a VAT return every 3 months and pay the VAT owed, if the firm is VAT registered.
  • submit a Full Payment Submission before every payroll payment if the firm employs staff.

Each individual partner must

  • Submit their own Self Assessment tax return and pay tax and Class 4 National Insurance on their share of the partnership profits

We provide a comprehensive service to deal with all these matters for you.

For more information refer to our Accountancy Services and Tax Compliance pages

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