Partnerships have long been recognised as effective business models wherein everyone is focused on a common goal. You will know of some famous ones, such as the John Lewis Partnership or, more recently, the Charles Tyrwhitt shirt business.
As with John Lewis, the pay of all partners will be linked to our success. You will still receive exactly the same money as you always have done, but now, in addition, partners will also share in the success of the partnership. So, every time profitability increases through enhanced revenue or cost reductions, everybody gains. It’s a win, win!
And as partners, it becomes everybody’s responsibility to solve whatever problems we have and to ensure the team delivers a completely remarkable experience for customers.
In the UK, the Limited Liability Partnerships Act 2000 enabled LLPs (limited liability partnerships) to be formed from 2001 onwards. LLPs offer the benefit of limited liability protection to all LLP Members, or partners, in a partnership incorporated under the Act.
This means people can now become partners in business without exposing themselves to unlimited personal liability. The use of an LLP structure not only offers the cultural benefits of a partnership, which are manifold, but also provides some tax benefits resulting from the fact that the partners are normally treated as ‘self-employed’.
Partnerships are becoming increasingly popular as a business structure of choice for both new businesses and existing businesses, which can convert to LLPs or create a hybrid structure with an existing LTD business.
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