What is the difference between a partnership and a Limited Company?
A partnership is a group of people who collectively trade under a single trading name. Partnerships can contain unlimited numbers of partners, although obviously the minimum number is two. A partnership is not in itself a single entity, but there are a number of rules, which must be considered before entering or forming a partnership. Arguably, the most important is the fact that regardless of your share in the partnership, in the event of liquidation, the entire debt could be requested from yourself. A second point is that you are accountable for any losses the partnership makes, and thus any of your own personal finances, including your property could be used should the partnership run into financial difficulty. A Limited company works in a much different way. Again, there are a number of people, who trade together under a single company name (which must be registered with Companies House). A Limited Company has shareholders, each of which will hold a number of shares in the company.
