Partnership in Business Topic 2022

Transcript
Slide 1
Parties that are selecting “partnership” as their business structure have to evaluate
its key characteristics to receive its benefits. In Australia, it is divided into general
and limited. Partners have the option to share their profits equally in the case of a
general partnership along with their losses. However, the liability becomes limited in
the case of a limited partnership. It is my recommendations that selection of a limited
partnership will be a suitable option in your case.
Slide 2
The process of setting up the business is simpler because registration is not
mandatory for the parties. However, the registration benefits the parties. It is
important that the parties must specific the number of partners, details regarding
their capital contribution and their authority while establishing the business. They
must also apply for collecting “Tax File Number” that will allow them to file a separate
tax return for the partnership business. They must also apply in order to collect
relevant business licenses as well as registration certificate to conduct their
business. They should also create a partnership agreement in which they should
include details regarding profit sharing ratio, partners’ roles and authorities1.
Slide 3
Partnership agreements can be in written or oral format. However, written
agreements are recommended because it makes it easier for partners and third
parties to understand its terms which eliminate vagueness. It also facilitates easier
resolution of dispute between the parties since they are able to write and identify
each other’s roles, responsibilities and authorities in the business. It also assists in
protecting the interest of both minority as well as majority owners. It is also easier for
the partners to determine the future of the business when one partner dies or leave
the business2.
1 Business, Business Structures (2020) < https://www.business.gov.au/Planning/Business-structures-
and-types/Business-structures>.
2 LawDepot, Create your partnership agreement < https://www.lawdepot.com/au/partnership-
agreement/#.Xp4n3WYzbDc >.