Partnership, LLP or Limited Co?

Natsmomma

Hi Everyone

I'm a management accountant by trade, who's now an MIP and trading happily with SAs, small Limited Company accounts and so on.

I have a client who's been self employed but has a new venture in partnership with a friend
co-writing a book and setting up a website to support the book and various products around it. What he wants advice on is how to set up the business. Partnership, LLP or Limited Co. Like everyone else he'll want the least hassle but safest solution. However I think the business name and copyright of the book need protecting. I've not dealt with this before, but I'd love the experience goinmg forward.

Should I suggest handing it to a colleague or go for it? If so, any advice?

Many thanks

Natsmomma

jamesm96

I must admit, as far as protecting the name is concerned I'm never really sure why people get hung up on company names. I see that as more of a copyright / trademark issue which is something for the solicitors to deal with rather than the accountant.

In terms of Partnership (1890) vs LLP/LTD, I'd say if the profits are going to be reasonable, then neither Partnership nor LLP will be great as there's an NI bill on the profits, whereas in the LTD co you get the same rate of tax for 31.3.12 but no NI on the drawings reported as dividends.

If profit isn't the issue and you're more worried about the liability of the guys involved, then Partnership doesn't offer any protection so it's either LLP or LTD, in which case I still wouldn't bother with LLP in case the future profits increase.

Does that help?

Natsmomma

Thank you Mike, that helps a lot.

I had the impression that LLP wasn't a realistic option and that I should advise him to go Ltd. I suspect that he'll go for a simple partnership, but have advised him that his rights are not protected if he chooses that option.

All useful experience for me though!

Kind regards