Starting a business doesn’t need to be a solo affair.
Set your partnership up for success.
It’s important you don’t pay more taxes and business costs than you have to. As a partnership, your business will be equally divided between all business partners who will share the businesses income and losses. Like sole traders, partnerships are clean and simple to set up, however you must be aware of the liabilities.
Each partner will need their own Tax File Number (TFN) and Australian Business Number (ABN). Partnerships can be formed with a verbal agreement or a written agreement, however it is advisable to get a written agreement in instances of disputes and legal issues.
Partners are liable for the businesses debts and liabilities, and are also legally responsible for the actions and debts of the other partners. A partnership does not pay tax on its income, however it is spread equally across all partners from which tax will be paid on their share of the business. Under a partnership, you’ll need to submit a tax return both for your business, and an individual return as a partner of the business. This allows you to separate your business expenses and deductions. Some deductions are not available to the partnership, but may be claimed by the partners.
A partnership is responsible for withholding income tax from the wages of employees, as well as any superannuation obligations. If your business earns over $75,000 per annum, you will need to collect and pay the Goods and Services Tax (GST) and lodge your Business Activity Statement (BAS) at a time directed by the Australian Taxation Office (ATO).
Choosing the right accountant and bookkeeper for your business can help you maximise your business income. As a sole trader, you’ll need help managing the finances of your business, as well as your taxation obligations.
We can help you and your business partner navigate your taxes throughout the year
You may run your business by yourself, but you don’t have to worry about your financial obligations on your own
We have more than 40 years experience guiding owners through their business accounting and corporate tax obligations