Does advice on avoiding being a sole trader/LLP apply to consulting partnerships?
BACKGROUND
I am expecting to be made redundant next week, and treating it as an opportunity to do some research and development with a friend.
Our primary focus would be in research, requiring a lot of time but little expenditure, so we were considering forming a general partnership while exploring ideas, and transitioning later to a limited company in the (actually quite unlikely) case that the research paid off.
The hope was that this would limit the amount of admin/accounting overhead during the initial research stage (and if we needed to close the company).
However, to be able to fund the research, we would also like to run one or two small technical consultancy projects on the side. i.e. work together to solve some problems for clients on a time and materials basis (not quite sure if this should be described as consultancy or contracting - we would both be providing advice on what to implement and doing the technical work of implementation).
Looking at this site, I found some things that seem a bit concerning.
However, I don't have the basic knowledge to understand whether these apply to our situation (as it is a different type of company, and perhaps there are different answers for consultancy or contracting).
QUESTIONS
1) Is this idea a non-starter? i.e. do people here find businesses unwilling to have consultancy contracts with general partnerships?
(I can ask the prospective clients, but just wanted to check if there is a standard answer before asking the question)
2) Does anyone here actually operate as a general partnership offering consultancy services?
I have found some sites that say there is a usual progression from sole trader to general partnership to limited company, but very little evidence on this site that this is true.
Most people seem to have their own limited company or use an umbrella company.
3) If anyone does operate as a general partnership, would the contract for services refer to the company name, or does each individual need their own contract?
(I have found that a general partnership is not a separate legal entity so not sure if it makes sense to have a contract with the company?)
4) Any other advice? (I am finding the business/tax research all a bit new and overwhelming so getting tempted to abandon this dream and search for a new job instead)
META-QUESTION
5) I would like to get some professional advice before starting the business, but not sure who I should be asking.
Do you think the questions above are better answered by a solicitor or an accountant?
I am expecting to be made redundant next week, and treating it as an opportunity to do some research and development with a friend.
Our primary focus would be in research, requiring a lot of time but little expenditure, so we were considering forming a general partnership while exploring ideas, and transitioning later to a limited company in the (actually quite unlikely) case that the research paid off.
The hope was that this would limit the amount of admin/accounting overhead during the initial research stage (and if we needed to close the company).
However, to be able to fund the research, we would also like to run one or two small technical consultancy projects on the side. i.e. work together to solve some problems for clients on a time and materials basis (not quite sure if this should be described as consultancy or contracting - we would both be providing advice on what to implement and doing the technical work of implementation).
Looking at this site, I found some things that seem a bit concerning.
However, I don't have the basic knowledge to understand whether these apply to our situation (as it is a different type of company, and perhaps there are different answers for consultancy or contracting).
QUESTIONS
1) Is this idea a non-starter? i.e. do people here find businesses unwilling to have consultancy contracts with general partnerships?
(I can ask the prospective clients, but just wanted to check if there is a standard answer before asking the question)
2) Does anyone here actually operate as a general partnership offering consultancy services?
I have found some sites that say there is a usual progression from sole trader to general partnership to limited company, but very little evidence on this site that this is true.
Most people seem to have their own limited company or use an umbrella company.
3) If anyone does operate as a general partnership, would the contract for services refer to the company name, or does each individual need their own contract?
(I have found that a general partnership is not a separate legal entity so not sure if it makes sense to have a contract with the company?)
4) Any other advice? (I am finding the business/tax research all a bit new and overwhelming so getting tempted to abandon this dream and search for a new job instead)
META-QUESTION
5) I would like to get some professional advice before starting the business, but not sure who I should be asking.
Do you think the questions above are better answered by a solicitor or an accountant?
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