Types of partner

There are three main types of partner, each of which has different rights and responsibilities:

General partners

General partners invest in the business, take part in running it and share in its profits. Each general partner is fully liable for any debts that the partnership may have. This means that they could lose more than their initial investment in the business if it runs into trouble, and that their personal assets could be at risk. Every partnership must have at least one general partner.

Sleeping partners (dormant partners)

Sleeping partners invest money in the business and share in its profits, but do not take part in running it. Like general partners, they are fully liable for the partnership's debts.

Companies

Companies can be members of a partnership. If so, they have the same rights and responsibilities within the partnership as other partners, but they also have some additional tax matters and reporting obligations. Partnerships whose members are all companies have to prepare "partnership accounts" and send these to Companies House (or the Northern Ireland Companies Registry) each year. The members of these partnerships must attach a copy of these accounts to their own company accounts when they submit these to Companies House.