These work a lot like being a sole trader, except obviously there’s at least two of you.
You share liability for any debts that are owed by the business and it’s really sensible, before you go into any partnership, to have a written agreement between the partners.
This provides clarity if you fall out and helps if one of you wants to move on, sell out, reduce your role or commitment, or if you both decide to turn your partnership into a company further down the line on the back of success.
Limited liability partnerships (LLP) share the same tax liabilities and distribution of any profits as normal partnerships, although partners have a reduced financial liability.
LLPs are popular structures with property companies and buy-to-let landlords, as well as professional services firms like solicitors and architects.