Very little practical experience with partnerships; so I would welcome comments on flaws or alternative suggestions with this set up - edited fro brevity:
Mr A is the common partner in 2 separate family partnerships. Partnership 1 (P1, and not a client) is Mr and Mrs A selling and fitting bespoke bathrooms for 25 years. Partnership 2 (P2; new client) is run by Mr A and his son B. It’s been selling and fitting off the-peg bathrooms for say 7 months.
Mrs A prepares separate books, VAT registrations, CIS etc for the 2 partnerships. Premise of both is 50:50 profit share with no partnership agreement.
P2 starting to grow fast, supported by un recharged labour, bookkeeping, office/showroom space from P1. Mr A has asked if P1 can invoice P2 for labour, room space, services of Mrs A etc. Is there an issue with:
- Mr A being common to both partnership trades or
- trade labour being provided to P2 via invoicing with VAT
Or should they simply reconsider their proposed 50:50 profit share to reflect what each brings to P2 including that very substantial rent/admin/labour contribution from P1 to P2's business. Perhaps Mr could take a fixed share first to cover this.