BUSINESS STRUCTURES – The Partnership as a Business Structure
Partnerships are a popular trading structure. They have found their primary applications in the following situations:
- where revenue losses are anticipated in the immediate or near term, and where those losses can be utilised by the partners at their personal level to offset against income from other sources (subject to the application of the “non-commercial business activities” in Div 35 of ITAA 1997)
- in family businesses, where the relationship between the participants is relatively informal
- professional practices, where the rules associated with the profession require the participants in the practice to contract in their own names, and not through other legal structures
- where one or more of the partnership assets is likely to increase in value, and therefore the ability to access the 50% CGT discount on the disposal of the assets is important to the partners
- where there are more than two equal participants in the business and the partners are likely to be able to qualify for the various CGT small business concessions.
FORSYTHS have extensive experience in the operations of a business through a partnership structure and should be consulted on the following to ensure the business is correctly established.
You will need to be registered for GST if:
- you are set up ABN and GST registrations.
- apply for trading name through office of fair trading.
- establish partnership agreement particularly covering the circumstances of transfer of assets in case of death, sale of business, or partner wishing to exit business.
- advise on business insurance such as public liability.
- organise risk insurance such as life and income replacement.
- organise bookkeeping and computer training and set up chart of accounts, gst training etc.
- arrange for BAS to be lodged or at least checked until fully correct.
- organise payroll and taxation training for staff.
- organise a business plan and cashflow document to enable financing to become more readily available.
- organise financing.
- organise wills.