For tax purposes, a partnership is an association of people who carry on a business as partners or receive income jointly. A partnership is relatively inexpensive to set up and operate. A formal partnership agreement is common, but not essential.
If you operate your business as a partnership, control or management of the business is shared. Income and losses are shared among the partners. Each partner is responsible for the debts of the partnership, even if you did not directly incur or cause the debt.
Knowing the main features of a partnership business structure may help you decide if this structure is best for your business.
Tax file number (TFN)
If you operate your business as a partnership, it needs its own TFN that you use when lodging its annual business income tax return. You can apply for this on the ABN application form.
Australian business number (ABN)
If you carry on an enterprise as a partnership in Australia, you can apply for an ABN for the partnership and use it for all the partnership's business dealings.
Goods and services tax (GST)
As a member of a partnership, you can apply for GST registration for the partnership if it is carrying on an enterprise. You can apply for registration on the ABN application form. A partnership must be registered for GST if its annual GST turnover is $75,000 or more.