The
Partnership structure is designed for businesses which have more than one
owner. The various State Partnership
Acts define ‘Partnership’ as “the
relationship which subsists between persons carrying on a business in common
with a view to profit”.
Each
state in Australia has it own Partnership Act and most states require written
evidence of a partnership if it is expected to continue for more than 12
months.
The
written agreement defining partners’ relations, and specifying how profits and
losses will be divided, generally includes the following provisions:
·
Names
and addresses of the Partners
·
Name
of the firm
·
Nature
of the partnership business
·
Duration
of the partnership
·
Initial
capital contributed by each partners
·
Distribution
of profits and losses to partners
·
Procedures
for partner salaries/ personal drawings
·
Partners’
roles within the business
·
Record
keeping and accounting procedures
·
Bank
details
·
Extent
of each partner’s authority
· Effects
of death, bankruptcy, expulsion, incapacity or retirement of a partner
·
Disputes
resolution processes
·
Procedures
for the dissolution of the partnership
Although
a partnership is often thought of as a unit, separate and apart from the
individuals who are the partners, and is treated that way for accounting
purposes, the law does not regard the partnership as a legal entity. Legally it
is simply a number of individuals. All
partners are jointly and individually liable for all debts and obligations of
the partnership. Liability is not
limited to an individual’s share of the debts and obligations as determined by
the partnership percentage.
Therefore,
partnerships offer no legal protection and are normally limited for use in
close relationships.
Income, losses and wealth are distributed to partners according to their
partnership percentage, and each partner’s share of the taxable income of the
partnership is taxed at their respective rates of income tax. While partnerships must lodge tax returns,
they do not pay tax in their own right.
It’s as simple as 1... 2... 3...
Want
to learn more about your business structure for your art & Design?
It’s as simple as 1... 2... 3...
2: Send an e--mail Quantum Compass: partnership@QuantumCompass.com.au and receive your PDF "
The
Advantages and Disadvantages of being a “Partnership”
3: Contact Vinh for a no cost, no obligation coaching session: http://www.surveymonkey.com/s/ArtShineDiscovery
Older Posts:
No comments:
Post a Comment