Partner Ship

A partnership is a business structure which allows up to 20 partners to carry on a business together. If there is no equal liability and different profit distribution, the partner agreement is the only legal document to support this with.

 

Partner system is not a legal entity, each partner must take personal responsibility for profits and losses associated with the partnership business.

 

Each member of the partnership commits to pay their own superannuation, but if the business hire others, they must pay superannuation for employees.

 

Partnership features:

 

Each member of partner shares profit and loss.

Partnership must have its own TFN and ABN.

End of financial year, partnership must distribute profit or losses to each members according the share structure as individual income. Partnership itself doesn’t have tax. Business partner in the case itself does not need to generate profits tax

It must register GST if partnership business annual turnover generates more than $75,000.

Partnership generally most wildly used as family partner business as half and half. And the remaining two kinds are complicated, must have a legal agreement to setup. The three types of partnership are:

1: Family Partnership;

2: limited liability partnership, the different members of a partnership assume different debt obligations;

3: “other partnership”, usually apply for lawyers, accountants partner institution of private joint responsibility and the protection of other partners;

 

In order to obtain qualified partnership ABN, the partnership has to have carry on a business.