UK Business Partnerships Explained simplified by Hesham Elrafei

In this video, we'll explore General Partnerships under UK Business Law and Companies Act clearly and concisely. The animated video gives a quick introduction to the following:

What exactly are General Partnerships and how do they work in the UK?
Key things to know about management, decision-making, and partner duties.
How do profit sharing and taxation work for General Partnerships?
The different ways a General Partnership can come to an end.

General Partnerships, UK Business Law, simplified
In the UK, a general partnership arises when two or more individuals decide to do business together and aim for profit, even without a formal agreement.
Every partner has an equal right to participate in the management of the partnership. A simple majority vote suffices for most decisions, regardless of each partner's capital contribution. However, important decisions, such as adding new partners, changing the business's nature, or amending the partnership agreement, require unanimous consent.
Partners owe duties of good faith towards each other. This includes sharing information about partnership affairs, avoid competing with the partnership, and hand over any profits derived from the use of partnership property or opportunities.
Terminating a partnership varies based on its type. Partnerships with a defined term or specific purpose end when the term concludes or the goal is achieved. Meanwhile, 'partnerships at will' can be dissolved anytime by any partner giving notice to other partners. Courts can also order dissolution under certain circumstances, such as a partner's incapacity or misconduct.
Upon dissolution, the partnership doesn't immediately cease to exist. Instead, it enters a winding-up phase, settling transactions, liquidating assets, paying debts, and distributing remaining assets among the partners as per the partnership agreement or equally if no agreement specifies otherwise.
Taxation is another critical aspect of the partnership. Each partner is taxed on their share of the partnership's profits, based on their personal income tax rate, irrespective of whether these profits are distributed.

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