*Includes 1-2 year registrations. After this term, we can renew them for you.
A partnership has a lot in common with a sole trader structure, just with more people. There's also slightly more regulation and admin. A partnership is formed when 2-20 people join forces in an unlimited liability business agreement. This means all profits, losses, responsibilities and liabilities are shared. You'll have access to more resources, but it's wise to get your partnership agreement signed and sealed before kick off.
Max and Peter met at Uni and have been best friends for the past 10 years. They are finally realising their dream of starting a local cafe and with Max’s business acumen and Peter’s skills in the kitchen- it’s a perfect partnership. They wanted to make sure their business was set up in the cheapest and most accurate way possible, so they chose a general Partnership.
This structure means that both Max and Peter have equal authority in the business, so most decisions are made by them together, however, decisions can be made by either partner on behalf of the other- even if the other doesn’t know!
The Partnership has its own ABN and Tax File Numbers and is registered for GST. Tax returns for the Partnership are lodged independently of each of the partner’s tax returns.
Both partners are ‘jointly and severally’ liable for all debts incurred by the business. This means that if the business fails, the personal assets of both partners may be seized to pay for any debts or liabilities of the business.
In the future Max and Peter may want to expand the Partnership by including another partner or entity or they can change their business structure if they want to scale up.