The General Partnership in Ireland

The Irish Partnership Act

Foreign investors who intend to open companies in Ireland have a wide variety of business structures to choose from. Among the types of companies available for registration in Ireland are also partnerships. The legislation distinguishes between several types of Irish partnerships:

• -          general partnerships;
• -          limited partnerships;
• -          investment limited partnerships.

The general partnership in Ireland falls under the regulations of the Partnership Act of 1980. General partnerships offer different advantages to foreign investors starting with tax benefits and fewer disclosure requirements. Under the Partnership Law, a general partnership is a business association between at least two individuals or companies which share a common point of view.

If you need assistance to start a general partnership you can request the services of our Irish specialists in company formation. Our team can also handle the entire process of opening a bank account in Ireland for your business.

Who can open general partnerships in Ireland?

The general partnership is a business form which can virtually be set up by anyone, however, there are a few categories of professionals who can undertake commercial activities only under the form of a general or limited partnership. These are doctors, lawyers, accountants, and vets. As professionals, these persons cannot operate if they open a company in Ireland.

We invite you to watch a comprehensive video about the general partnership in Ireland, created by our team of experts in company formation in Ireland: 

Reasons to set up a general partnership in Ireland

There are many reasons for which business persons can decide to set up Irish general partnerships instead of limited liability companies. Among these are:

1.           the general partnership can be used for accounting and taxation reasons, as it offers certain benefits;
2.           the general partnership is can also be used for privacy reasons, as certain information can be withheld from disclosure;
3.           the registration requirements for a general partnership are simpler than for Irish companies;
4.           one of the partners can act as a business manager; also, the general partnership does not require a secretary;
5.           if they want, the members of the partnership can decide not to register the business with the Trade Register.

Our company registration specialists in Ireland can offer more information on the reasons why one should choose to start a business under the form of a general partnership. We can also help if you are interested in changing a general partnership into an Irish limited liability company. The proposed name for your Irish company must be distinct from any other local companies and must be original. The usage of specific terms requires for particular authorization. Non-descriptive words like ‘services’ and ‘solutions’ are rejected because they have no bearing on how to set the name apart from those of other businesses. So, if you are looking to set up a company in Ireland, get in touch with our specialists for guidance in choosing a trading name.

Setting up a general partnership in Ireland

According to the Irish legislation, a general partnership can be set up by at least two private individuals or corporate entities. The maximum number of partners in a general partnership in Ireland is 20. However, there are cases in which exceptions are made and the number of partners can sensibly grow. The creation of an Irish general partnership resides in a partnership agreement that can be concluded orally or in writing. Most of the times the written form of the agreement is used. General partnerships in Ireland can be divided into:

• -          informal partnerships concluded for an indefinite period of time,
• -          formal partnerships for limited periods of time.

The general partnership can carry one of the partners’ surname or have a different business name which will be registered with the Irish Trade Register.  The liability of partners in an Irish general partnership is unlimited, considering the business entity has no separate legal personality from its owners. In case you are interested in setting up this type of partnership, our Ireland company formation agents can help you. Businessmen interested in setting up this business form in another European country, such as Slovenia, can be put in contact with our partners who are experts in company formation matters in Slovenia.

The partnership deed in Ireland

Even if the creation of a general partnership does not require signing any document, it is strongly advisable to draft a partnership deed through which all the conditions of the business are explained. The partnership deed must contain information about the name of the partnership, the name of each participant to the business, as well as information about their role in the Irish general partnership.

The following conditions must be met for the creation of a general partnership in Ireland:

• -          the minimum number of members in the business is 2, while the maximum number can be 20 or 50 (in the case of financial partnerships);
• -          the trade name of the partnership must contain at least one of the names of the members in the business;
• -          if any of the partners decline to use their names, the members are required to register a name with the Trade Register just like any other company;
• -          the partnership agreement must contain information about the contribution of each member to the business;
• -          the partnership agreement can also contain other clauses related to the management of the business.

The partnership deed when creating an Irish general partnership is important for several reasons. Among these, the document can represent the understanding between the members and can provide for important information such as establishing the role of each member, decide on how a partner can be replaced or how one can resign. The partnership deed can also provide for the dissolution of the business.

The partnership deed must be signed by all the members and must be authenticated by an Irish public notary.

There are also other forms which need to be filed with the Companies Registrar when setting up a general partnership in Ireland.

Our Irish company formation advisors can help those who want to create general partnerships and who want to draft partnership agreements in this sense.

The taxation of Irish general partnerships

From a taxation point of view, the Irish general partnership is a very advantageous type of company. Even if the partnership must register for taxation purposes with the Revenue Commissioners, each partner will receive a different tax registration code and thus will be taxed individually on their incomes.

From a taxation point of view, the general partnership must register for the following taxes:

• -          the income tax;
• -          the value added tax;
• -          the PAYE (Pay as You Earn) tax as an employer;
• -          the contract tax.

When it comes to the individual taxation of the partners, they will be subject to the income tax which can apply at a 20% or 40% rate, depending on the annual income. In order to determine the tax to be paid, each partner must file a tax return indicating the income earned in the past year. Another return which must be filed with the Revenue Commissioner’s Office is a self-assessment return. When the annual tax returns are filed before August 31^st, the self-assessment return no longer needs to be filed.

Each partner must also pay a preliminary tax for the current year. Individuals must file Form 11 when paying the income tax. Also, in case you need assistance for VAT registration in Ireland, our agents can help you.

The members of a general partnership in Ireland must also register and pay the social insurance if they make a minimum annual income of 5,000 euros and if they are aged between 16 and 66. Our specialists can provide more information on this subject; those involved in cross-border trading can also rely on us for advice on the EORI registration in Ireland. 

For complete information about the advantages of opening a general partnership in Ireland, do not hesitate to contact our Irish company formation agents. Our local advisors can offer more information on how general partnerships are taxed in Ireland.

You can also rely on our specialists for tailored accounting services. In case you would like to set up this type of company in another country, for example in Switzerland, we can put you in contact with our partners. They can help you open any type of company in Switzerland fast and easy.