NIM21020 | Class 2 National Insurance Contributions: Small Earnings Exception: Special Groups: Partnerships

The net profit was allocated between the individual partners in a partnership. Partners usually entered into a Partnership Agreement under which, amongst other things, they specified how profits were to be calculated and divided. The agreement did not have to be in writing, it could be oral or implied. An agreement could be altered from time to time with the consent of the parties. It could have been agreed, for example, that a partner’s share of the profits for a given year was limited to a particular sum. Where there was no agreement providing for a different apportionment, the law assumed profits to be divided equally, regardless of the partners’ initial contribution to partnership capital.