In Queensland, partnerships are governed by the provisions of the Partnership Act 1891.

A partnership provides a relatively simple vehicle by which you can establish a business with others in a short time frame – for example, a partnership can be formed by an oral agreement between the partners.

However, even in the absence of a formal partnership agreement, the law may deem a business relationship between you and others to be a partnership where you are “carrying on a business in common with a view of profit”.

For this reason, it is prudent to seek legal advice about drawing a partnership deed that sets out the agreement between the partners, and stipulates in clear terms their respective obligations.

You should be aware that all partners are “jointly and severally” liable for the obligations of the partnership – for example, a creditor could recover a debt from one partner even though the debt was incurred by the partnership.

In addition to individual tax returns, a partnership tax return is also required.

Unlike most companies which have limited liability under federal law, partners are individually liable for the debts of the partnership.

Please contact us for more information.