A partnership structure is where you and one or more people are carrying on business together, and receiving income jointly. There are more shoulders to bear the burden, but also more people to share profits, losses and responsibilities.
Partnerships are inexpensive to set up, and there will likely be greater financial resources than if you operated on your own as a sole trader. On the flip side however, you and your partners are responsible for any debts the partnership owes, even if you personally did not directly cause the debt.
And each partner’s private assets may still be fair game to settle serious partnership debt. This is known as ‘joint and several liability’ – the partners are jointly liable for each other’s debts entered into in the name of the business, but if any partners default on their share, then each individual partner may be severally held liable for the whole debt as well.
As a partnership:
• the business itself doesn’t pay income tax. Instead, you and your partners will each need to pay tax on your own share of the partnership income (after deductions and allowable costs)
• the business still needs to lodge a tax return to show total income earned and deductions claimed by the business. This will show each partner’s share of net partnership income, on which each is personally liable for tax
• if the business makes a loss for the year, the partners can offset their share of the partnership loss against their other income
The GST system is a complex and confusing one. For this reason AWARD ensures its staff are continuously up to date on the changes, and able to offer you accurate advice.
Every transaction now brings with it a GST issue. We have experience with these issues and are able to offer expert advice on the implications of GST for your business.
The GST related services we offer include, but are not limited to:
- Advice on registering for GST
- Filing and adjusting GST returns
- ATO audit assistance
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