Partnership or 2 separate self employments ?

Partnership or 2 separate self employments ?

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2 new clients have come to see me. In addition to their full time jobs, they have recently started to do some part time computer repair work in evenings and weekends.

One of them is good at fixing computers, and the other is good at software problems and networks etc.

When they get a customer, the ‘partner’ with the right skills gets the job and keeps the money for doing it. So far, the one repairing computers has earned approx £700 in the last 2 months, and the other has earned £300.

I am about to formalise things with HMRC – forms cwf1 etc. It struck me whether these guys would be better being treated as 2 separate self employed individuals rather than a partnership. If it is a partnership, the profit sharing is going to be a nightmare. Would it be acceptable to have them both as self employed, but using the same ‘trading as’ name ?

They don’t have any great plans for expansion etc – this always going to be a part time job. I just thought it may be easier for them to ‘manage’ as separate trading entities.

Any thoughts / suggestions would be recommended

John Hughes

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By mikewhit
27th May 2008 16:21

Joint overheads ?
Still, wouldn't it be beneficial to be able to share any joint overheads rather than having to pay twice over ?

Also a slightly larger job might need both their skills ...

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By skylarking
27th May 2008 14:51

Very loose
I am with you, in that it appears that you have two self-employed people with a loose business relationship.
I have found that those with a serious view to 'partnership' have gone to the trouble of seeking advice from a solicitor and getting a formal agreement drawn up.
In your case there is no intention to share profits with equal risk and reward and unless they have (m)any shared costs to account for there appears not to be a partnership in the sense we usually recognise. As sole traders they could still promote themselves as 'Joe Boggs, in association with Jim Smith'.

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