A partnership business is one which is run by two or more people together. An agreement in writing is required that clearly states the terms and conditions on how to run the business without harming the interest of either of the parties. The sharing of the company profits would be either equal distribution or according to the terms that are given in the written legal agreement. Also the liabilities are also shared in the same manner as the profits. With the Limited Liability Partnerships Act, partners can profit from limited liability and reap tax advantages.
The liability protection of the corporation is the major advantage of the owners of a Limited Liability company. A limited liability company is a separate entity which is similar to a corporation. The members cannot be in any way held responsible for any sort of liabilities unless they agree upon by signing a personal guarantee.
Companies having a limited liability have varied options for distribution of profits. The profit distribution need not be 50-50 like partnership firms. Flexibility in the distribution of profits is higher for limited liability companies.
In the United Kingdom, the Companies House is the one that is responsible for the registration of a company. Prior to the formation of a company as a private limited entity, it is compulsory that the firm registers with the Companies House.
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