{"id":568,"date":"2018-01-21T00:38:36","date_gmt":"2018-01-20T13:38:36","guid":{"rendered":"https:\/\/mnygroup.wpengine.com\/?p=568"},"modified":"2025-02-01T15:41:20","modified_gmt":"2025-02-01T04:41:20","slug":"all-you-need-to-know-for-partnership-start-up","status":"publish","type":"post","link":"https:\/\/mnygroup.com.au\/en\/all-you-need-to-know-for-partnership-start-up\/","title":{"rendered":"All you need to know for Partnership Start-up"},"content":{"rendered":"<p><span class=\"_5afx\"><span class=\"_58cm\">Partnerships\u00a0<\/span><\/span>can be less expensive to set up as a business structure than starting business as a\u00a0<span class=\"_5afx\"><span class=\"_58cm\">sole trader<\/span><\/span>, as there will likely be greater financial resources than if you operated on your own.<\/p>\n<p>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.<span class=\"text_exposed_show\"><br \/>\nEach partner&#8217;s private assets may still be fair game to settle serious partnership debt. This is known as \u201cjoint and several liability\u201d \u2013 the partners are jointly liable for each other&#8217;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.<\/span><\/p>\n<div class=\"text_exposed_show\">\n<p><strong>Other general factors to note about partnerships include:<\/strong><\/p>\n<p>\u2022 the business itself doesn&#8217;t pay\u00a0<span class=\"_5afx\"><span class=\"_58cm\">income tax<\/span><\/span>. Instead, you and your partners will each need to pay tax on your own share of the\u00a0<span class=\"_5afx\"><span class=\"_58cm\">partnership income<\/span><\/span>\u00a0(after deductions and allowable costs)<br \/>\n\u2022 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&#8217;s share of net partnership income, on which each is personally liable for tax<br \/>\n\u2022 if the business makes a loss for the year, the partners can offset their share of the partnership loss against their other income<br \/>\n\u2022 a partnership does not account for\u00a0<span class=\"_5afx\"><span class=\"_58cm\">capital gains\u00a0<\/span><\/span>and losses; if the partnership sells a\u00a0<span class=\"_5afx\"><span class=\"_58cm\">CGT\u00a0<\/span><\/span>asset, then each partner calculates their own capital gain or loss on their share of that asset<br \/>\n\u2022 the partnership business is not liable to pay\u00a0<span class=\"_5afx\"><span class=\"_58cm\">PAYG<\/span><\/span>\u00a0instalments, but each partner may be, depending on the levels of their personal income<br \/>\n\u2022 as a partner you will need to take care of your super arrangements, as you are not an employee of the business<br \/>\n\u2022 money drawn from the business by the partners are not \u201cwages\u201d for tax purposes<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":17,"featured_media":569,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1689],"tags":[],"class_list":["post-568","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-advice","masonry-post","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-20"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/posts\/568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/comments?post=568"}],"version-history":[{"count":0,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/posts\/568\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/media\/569"}],"wp:attachment":[{"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/media?parent=568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/categories?post=568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mnygroup.com.au\/en\/wp-json\/wp\/v2\/tags?post=568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}