A partnership is a business structure that involves a number of people who carry on a business together. You may choose a partnership over a sole trader structure for example, if you’ll be jointly running the business with another person or a number of people (up to 20).

 There are two types of partnerships – general and limited. Partnerships are governed by the Partnership Act 1958.

Key aspects of a partnership structure

It’s relatively easy and inexpensive to set up.
It requires a separate Tax File Number (TFN).
If you are carrying on an enterprise, you can apply for an Australian Business Number (ABN), but this is not compulsory.
It’s not a separate entity – like a sole trader, you and your business partners are personally liable for the debts of the business.
You have shared control and management of the business with your partners.
The partnerships doesn’t pay income tax on the income earned. You and each of your partners pay tax on the share of the net partnership income you each receive.
Requires a partnership tax return to be lodged with the Australian Taxation Office (ATO) each year.
Each partner is responsible for their own superannuation arrangements – you are not an employee of the partnership.
You must be registered for GST if the annual income turnover is $75,000 or more