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Partnership and the possible introduction of corporate partners

Partnership and the possible introduction of...

Dear All

I have the following Scenario

Trading Partnership in existence with Dad owning 70% brother 20% daughter 10%

Partnership is making healthy profits but these are not required by the partners with circa £1.7m within their capital accounts (drawings are minimal)

As a result I am looking into the possibility of having three corporate partners i.e a company for each shareholder. We can then pay the profits to the companies paying CT tax at 21%. The reason that the shareholders will have a company each is to enable them to draw as they please via dividends

HAs anyone carried out a similar exercise?Any issues to note?

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02nd Dec 2010 14:56

you could convert to an LLP

and create some goodwill , can you still do this but there is no AIA if there are corporate partners

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By blok
02nd Dec 2010 15:18

.

I know that people are doing this.  I think it is quite aggressive. 

You need to consider the fact that the companies need to have some activity.  In my little mind I would find it difficult enough to substantiate one company having activity to merit its inclusion, never mind three!!

 

 

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By skay98
05th Dec 2010 19:07

Thanks for the great reply...

Everyone seems to have a different view on this....

One partner at our firm suggested the partnership and 3 corporate partners possibly, one suggested creating an LLP again with corporate partners and i suggested the limited co and alphabet shares as you did-seems the most straight forward to me but everyone has their opinions I guess..

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28th Sep 2012 16:48

Capital Idea

But depending upon the business dont you have issues with the loss of APR/BPR with the assets not maybe being owned by the same trading entity.

 

If there are properties being used by the business and being maintained by the new "corporate structure" dont you then need tenancy/lease agreements etc etc. leading to benefit in kind issues.

 

 

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