sole trader to become a parntership

sue311

Hi all,
My sister has worked for herself ever since leaving University and has built up quite a good little business in the 3 years since she graduated.
She has so much work on that she is having to turn away new clients.
I was working full time untill I had a baby who is now nearly one and she has asked if I want to go into partnership with her.
She has done her accounts herself since she started the business but I wouldnt know where to start.
She doesnt take all money earned out of the business as wages as she is trying to build up the business and is doing a pretty good job of it actually.
Does any one know how the accounts are done in a partnership please, since having the baby I would love to refrain from going back to work full time.

anamenottaken

Partnership - you share the responsibility for the debts of the business and you should have a written agreement on whether you share profits 50/50 for example.

What sort of income would you expect? Would being an employee of your sister be possible? That is, I wondered if you could be paid the National Living Wage (or NMW depending on your age) which would be a requirement if you were an employee.

Savvy_Sue

DON'T whatever you do enter into a 50/50 partnership with her. That's a recipe for disaster should you ever disagree: you have stalemate!

paddyrg

Partnership has a specific legal meaning, which is unlikely to be what actually will work best for you, especially as she had already invested 3 years and the adminstration imbalance. Instead I'd suggest starting off as a flexible employee to cover clients she's too busy for, and as you start bringing your own clients so so on a chair rental basis like many salons and hairdressers. It keeps it flexible for you if you need to spend more time with the baby, and means she can get other people to cover or bring their own clients to her premises. That would be pretty flexible all round without the burden of a formal partnership which will lead to tears from your description, and leaves you 100% liable for any business debts too.