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Clear Tax Accountants

Partnership Business Structure

What is a partnership business structure? Partnerships are intricate business structures that require skilful business management to perform at their peak. A partnership is formed from two or more partners paying tax on their share of the income of their business. Tax is charged at the personal tax rate which goes up with earnings.

The benefits of a company business structure include:

  • More available capital and easier establishment
  • Greater borrowing capacity and flexibility
  • Shared responsibility

While a partnership can be beneficial for business owners, it can also be difficult to understand and respond to your obligations. Clear Tax is here to help you navigate the intricacies of a partnership, and help you find greater success in the long run.

Lower costs

A partnership generally requires less paperwork and lower fees to establish than a sole trader or company business structure. A partnership is an ideal structure for a new business to hit the ground running with low capital.

Diverse skill sets

Unlike sole trader structures, partnerships allow all partners to bring their own diverse skill sets to the table. The partnership also encourages the pooling of shared intellectual and financial resources to drive more capital.

Simple operation

There are no reporting or management obligations in a partnership – similar to a sole trader structure. Each partner shares business decisions, or directs business decisions to one half of the partnership. 

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Business Plans For Partnership Structure

Restructuring from a sole trader or company business structure does not happen without some serious planning. Clear Tax can help you to organise, set up, and systemise your transition to give you the best possible start to your partnership.

At Clear Tax, our tax planning experts work with individuals to create an effective partnership business structure that helps them pay less tax while staying abreast of all of their individual and shared tax obligations.

We want to help you reach your business goals while averting any risk. As our client, your success is our top priority. This means approaching all business restructuring goals in an ethical and pragmatic way.

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What Our Clients Say About Our Melbourne Partnership Restructure Services

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I have worked with Clear Tax Accountants in Richmond Melbourne for about one year. They have managed my returns, my Jobkeeper, my grants and all they have done very professionally and are a wonderful friendly group of friends. I recommend them if you’re considering an accounting firm.
Great job to all of your Clear Tax teams. As the name states its been a very clear advice and efficient. Always helpful to develop our business via free seminars. Great job guys.
I have been dealing with Yuvraj for number of years. His personal, professional and prompt service is second to none, one of the many reasons i have referred her to my clients and friends. will continue to do so. Without a doubt, 5 star all the way.
Their services are dependable, quick, and reasonably priced. They keep me informed about new tax legisaltion that may affect my position and will assist me reduce the amount of tax I owe or maximise my refund. I’m certain that my taxes are being handled in the most efficient manner possible. Thank you very much!
Highly recommended clear tax accountant. Ash and Manish and the team are providing the best services in Melbourne, extremely helpful, knowledgeable and professional. They are very responsive and answer all your queries. Always happy with their work so thank you very much.
Ash and Yuvraj are a great team. They genuinely care and help people. They are professional and friendly. No matter how busy they are, they will always get back to you. I have called Ash few times and he has always called back irrespective of the time, always chirpy even over the phone. I would highly recommend their team.
Ash and the team at Clear Tax have been absolutely spot-on for me and my business. Thorough, informed, approachable and, above-all, affordable, their company provides an incredibly refreshing and forward-thinking alternative to the more ‘old-school’ accountancy firms. Thank you for helping me in an area of business I do not love!
We are delighted with the service Ash and his team at Clear Tax Accountants has afforded us since we joined them. They are very forward thinking utilising new software apps and technology. Most importantly for us, they are always accessible to help and answer our queries, as well as taking the time to get to know more about our business, Government Grants and how it works – a rare thing!
Excellent Service & help with all aspects of my accounts. Working as a micro-business I have little time to spend on accounts and the team at Clear Tax Accountants have looked after me brilliantly from the very beginning. I feel I am in safe hands and they answer queries in a very straightforward manner so I understand everything in order to decide what to do best for my business. Delighted with Ash and Yuvraj. Thank you!
We are delighted with the service Ash and his team at Clear Tax Accountants has afforded us since we joined them. They are very forward thinking utilising new software apps and technology. Most importantly for us, they are always accessible to help and answer our queries, as well as taking the time to get to know more about our business, Government Grants and how it works – a rare thing!
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Example Of A Partnership Business Structure

Sole traders can form a partnership when two individuals want to pool their resources to focus on growth. For example, Martin is a lawyer who services a regional hub. With the growth of the population post-lockdowns, he is finding it increasingly difficult to keep up with demand.

Martin wants to form a partnership with Janine, another local lawyer to expand their services, pool their financial resources, and continue servicing their area to the best of their abilities. After forming their partnership, they get started by leasing office space and equipment like printers.

Martin and Janine share liability for the debts that the partnership incurs. With this shared liability comes the opportunity for growth. Martin and Janine’s expertise canvasses different areas of the law, leading to greater shared income streams.

While things have been smooth sailing for a while, Martin and Janine are wary that potential disagreements may cause risk to the business. Both partners are also considered ‘agents’ for the other partner, leaving them liable for the other’s actions.

Frequently Asked Questions

About Partnerships
Below are answers to some of the most common partnership questions our accountants get asked.
  • How can I change my business structure from a sole trader to a partnership?

    To change from a sole trader structure to a partnership, you’ll need a new ABN. You should also consider drafting a partnership agreement that dictates how the partnership will be run. Each state has separate legislative demands for partnerships, so it’s important to do some research on your obligations.

  • What are the advantages and disadvantages of a partnership business structure?

    The advantages of a partnership structure are that they are cheap to set up, allow for the opportunity to diversify skill sets, and are simple and easy to operate in most cases.

    The disadvantages of a partnership are that both liability and profits must be shared. It’s also difficult to add or remove partners and there will always be increased chances for disagreement. Finally, there are no government grants to access partnerships.


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