Partnership

Partnership

Partnership

A partnership involves two or more partners (people or entities) carrying on a business together with a view to profit. Partnerships are governed by the Partnership Act of the state or territory in which the partnership was formed, and are limited to a maximum of 20 partners.

Partnerships have the following advantages:

 

 

  • It's relatively easy and inexpensive to set up.
  • Each partner has shared control and management of the business.
  • Partners are jointly contributing their labor, capital and skills to build the business. This increases the businesses chance of survival/success. (as compared to sole traders). 
  • Ability for income splitting.
  • Easy to dissolve.
  • Limited external regulation and partners business affairs are private.

 

 

The disadvantages with partnerships are:

  • Each partner is jointly liable for all partnership debts (unlimited liability).
  • Each partner is an agent of the partnership and is liable for actions by other partners.
  • There is the risk of disagreements and conflict between partners.

Similar posts you may like

  • Negotiate your mortgage and save thousands!mortgage house

    Negotiate your mortgage every quarter. It’s a great way to save money on monthly payments and overall interest costs. Here’s why and how: Why Read more

  • Taxation and Federation (1901)

    At Federation in 1901, the Australian Constitution granted the Commonwealth a monopoly of customs duties and excises and the power to levy other taxes Read more

  • Trustee Company

        A trustee company is a legal entity that acts as a fiduciary, agent or trustee on behalf of a person or business Read more

  • Get a Will

    Arguably, a Will is the most important financial asset for yourself and your family. It’s worth more than your house, your car, and your Read more

"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"

- Bono: U2