Partnership issues and acting for one partner

Partnership issues and acting for one partner

Didn't find your answer?

Hi,

We have been asked to act for a partner in a business, who has just realised his partner has changed the partnership split without his knowing, paid employees, but never ran payroll or paid PAYE and NI.

The partner has pretty much allowed the other partner to run the business, while he was 'on the tools'.

The current accountant has provided information to the potential client as far as he can,but I think he is concerned with his own position at the moment.

The person who has approached me ( through a very good existing client/friend and introducer to us) has asked me to act for him, but to help him do a declaration to HMRC re the PAYE etc. Indeed, I believe he has already spoken to HMRC and informed them and they have said they will look into it.

I will not be appointed agent of the partnership, as I will not have agreement of the other partner. The person asking me to act, does not what the existing accountant to act.

Would I be able to work on his behalf, dealing with the declaration to HMRC without approval of both partners?

Replies (4)

Please login or register to join the discussion.

By johngroganjga
23rd Sep 2014 09:04

No you can't act on behalf of the partnership without being duly appointed, which it doesn't sound as if you will be any time soon.

But you can of course advise the partner who has approached you.  That might include accompanying him to a meeting with the partnership accountant to discuss the issues that are causing concern.

You say that the other partner has unilaterally "changed the partnership split" but that can't be right.  There are many things he can do wrong if left to his own devices but changing the profit sharing arrangements is not one of them.  The other partner has an absolute veto on any such changes with which he does not agree, simply exercised by refusing to approve the accounts.

 

Thanks (0)
avatar
By Bor2903
23rd Sep 2014 10:11

Thanks John.

 

It seems the accountant has accepted the information from one partner,and has accepted approval of accounts by one partner, hence why I think the accountant is concerned.

I wonder also, on what basis the accountant has submitted the personal tax returns as the partner I know claims to never have seen/signed one, but he had tax liabilities for three years unpaid.

Thanks (0)
avatar
By User deleted
23rd Sep 2014 10:13

He needs to get legal advice

Thanks (0)
By johngroganjga
23rd Sep 2014 10:30

I agree that this looks as if it may need to go legal, but perhaps not just yet (see below).

Just  word of warning - take what your client (if he is one yet) says about never having seen or approved the tax returns allegedly submitted by the accountant in his name with a pinch of salt.  When clients say this it usually turns out to be untrue.  Remember that until you have the accountant's version of events you are hearing only one side of the story.

I think my approach would be to put the accountant on notice that your client (if he is one yet) does not agree the last (and previous?) accounts and takes the view that partnership and personal tax returns submitted on the basis of the figures included in them are incorrect, and ask him what he is planning to do about it.  You never know, he may sort out he whole problem for you.  

Thanks (1)