WHAT IS A PARTNERSHIP?
The Partnership Act, 1890 describes a partnership as a relationship which exists between two or more people carrying on a business with a view to profit. Partnerships are an important part of business life in Ireland and are beneficial for a number of reasons including accounting, taxation and disclosure advantages over limited companies.
For example, partnerships do not have to go through any registration process to be formed and in a partnership situation there is no obligation to file annual returns publicly. Furthermore, partners will only encounter one taxable event in the form of income tax on their share of the profits while members of a company will have to pay corporation tax on company profits along with income tax on any dividends paid to members. However, unlike a company a partnership is not a separate legal identity. This means that the partners have unlimited liability, unlike directors or shareholders in companies. The downside of this is that each partner is liable for the losses of his co-partner in carrying on the partnership business, even where the other party has defrauded clients of the business.
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