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Q: I’m starting a business with my husband, should we form a limited company?

Aug 17 2005

Answered by: Philip Wilkinson Ask a question

Whether you decide to be partners or form a limited company, the pair of you must have a written agreement on who does what, how the money is to be shared, what happens when one of you wants to leave. You may be in love now, but love can fly out of the door when the business hits problems, and you will need something written to fall back on.

A partnership is very simple to start and there are not a lot of regulations, and a new form, limited liability partnership, was introduced in April 2001, whereas with a company you may need to have it audited ). You also have forms to fill in for Companies House which can trip you up. And while the idea of limited liability which is offered by a company format can seem attractive, in practice, the directors of small companies have to give personal guarantees or security for loans, leasing, rent and some of the other big items.

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