Company versus partnershipAccording to s.1 Partnership Act 1890, a partnership is "the relationship subsisting between partners carrying on a business in common with a view to profit". Creating a partnership can be done verbally. In most partnerships, however, the partners prepare a written agreement called a Partnership Articles, Partnership Deed or Partnership Agreement. The agreement concluded between the partners determines the rights and obligations of each associate, as well as how the partnership will function. Furthermore, the agreement can be modified at any time through mutual understanding of all partners. Even in the case of a partnership there is no separate legal existence and the partners are equally liable for any debts. It is, however, important to point out that partnerships in Scotland differ from the rest of the UK and are legal entities, so partners can sue and be sued on behalf of the business (HMRC, 2014). There are three types of companies: "ordinary" commercial company, limited partnership and limited liability company. In the limited liability company (LLP) the partners are not personally liable for the debts of the company, while in the limited partnership the liability is divided unequally by the partners who pay only up to the amount initially invested in the company (GOV. UK, 2014). The main differences between partnership and a company are that the company must be registered under the Companies Act 1956, while partnership registration is not mandatory. Furthermore, as mentioned above, partnership unlike corporation is not a separate legal entity but a group of individuals. There are also differences regarding the minimum and maximum number of people involved in the partnership and the company. In... middle of paper... with. Most companies use standard articles of association, however, these can be amended or adapted as long as the company is not breaking the law (GOV.UK, 2014). The limited liability partnership agreement does not need to be registered with House companies and there is no document comparable to the Model Articles of Association which outlines standard articles as in the case of a limited liability company. However, it is in the interests of each member of an LLP to create an agreement that covers the most important issues in running a business. Some of these issues that should be included include: equal shares, involvement in management, no remuneration, member consent required for new members, decision making, access to books and records, duty to account for profits from competing businesses, duty to account for derived benefits, unjust prejudices, etc.