Running a business with a partner? We help Brisbane partnerships register correctly, structure the arrangement for tax efficiency, and understand the personal liability risks before they become a problem.
Book a 60-minute consultation — AUD $250, credited to your services if you engage. We’ll assess your situation and deliver a formal written proposal.
A 60-minute video call to assess your partnership structure, tax obligations, and registrations — and deliver a formal written proposal for our services.
Via video call · 60 minutes
Book Now — AUD $250
A partnership is a business structure where two or more people carry on a business together with the intention of making a profit. In Australia, partnerships are not separate legal entities — the partnership itself does not pay income tax. Instead, each partner declares their share of the net income or loss in their own individual tax return.
Partnerships can be formed with minimal formality — a verbal agreement is technically sufficient — but a written Partnership Agreement is strongly recommended to define each partner’s rights, responsibilities, and what happens if the partnership needs to be dissolved.
Low setup cost. An ABN and business name registration are the primary requirements. No ASIC company registration required.
Partners can agree to distribute income in any proportion they choose — it doesn’t have to be equal — subject to the terms of the Partnership Agreement.
The partnership lodges a separate tax return, but the tax liability flows through to individual partners at their marginal rates. Losses may offset other personal income.
A partnership can be the right structure for some situations — but it carries significant personal risk. These are the key limitations every partner must understand before trading.
Each partner is personally liable for all debts and obligations of the partnership — including debts incurred by the other partners on behalf of the business. If the business cannot pay its creditors, your personal assets (home, savings, car) are exposed. There is no corporate veil.
You are legally responsible for your partner’s actions taken in the course of the business — even if you were unaware of them or disagreed with them. If your partner signs a contract or takes on debt without your knowledge, you may still be personally liable for it.
Each partner’s share of profit is taxed at their personal marginal rate — up to 47% including the Medicare Levy. Unlike a trust, there is no ability to vary distributions each year at the trustee’s discretion. The split is fixed by the Partnership Agreement.
A partnership technically dissolves if a partner leaves, dies, or becomes bankrupt. While a well-drafted Partnership Agreement can address this, the legal exposure is real. A company or trust structure provides significantly better continuity and succession planning.
Once we confirm a partnership is the right structure for your situation, we take care of the full setup — correctly, in the right order, aligned with your obligations from day one.
Your partnership setup includes everything below, handled end-to-end:
The partnership itself does not pay income tax. It lodges a separate partnership tax return showing the net income or loss, and each partner’s share is then included in their own individual tax return. Each partner pays tax at their personal marginal rate on their share of the partnership income.
The partnership must lodge a separate tax return each year showing total income, deductions, and each partner’s share of net income or loss. This is in addition to each partner’s individual return.
Each partner includes their allocated share of partnership net income in their personal tax return. It is taxed at individual marginal rates — $0–$18,200 (nil), $18,201–$45,000 (16c), $45,001–$135,000 (30c), $135,001–$190,000 (37c), $190,001+ (45c), plus 2% Medicare Levy.
2025–26 ATO ratesIf the partnership makes a loss, each partner’s share of the loss may offset their other personal income — subject to the non-commercial loss rules and Personal Services Income provisions in the Tax Act.
Unlike a discretionary trust, the profit split in a partnership is fixed by the Partnership Agreement. You cannot vary it each year to minimise tax. This is a key tax planning limitation compared to a trust structure.
Consider a trust for flexibilityThe partnership itself must register for an ABN. If the partnership trades under a business name (other than the partners’ own names), that name must also be registered with ASIC. There is no requirement to register the partnership agreement itself with a government body, but a written agreement is strongly recommended.
No. The partnership does not pay income tax directly. It lodges a partnership tax return to calculate net income, but the tax liability flows through to each partner. Each partner includes their allocated share in their individual tax return and pays tax at their personal marginal rate.
Under Australian law, each partner acts as an agent of the partnership. This means you can be personally liable for debts and contracts entered into by your partner on behalf of the business — even without your knowledge or consent. This is joint and several liability, and it is one of the most significant risks of the partnership structure.
Legally, no — a partnership can exist without a written agreement. However, without one, the default provisions of state partnership legislation apply, which may not reflect what the partners intended. A well-drafted Partnership Agreement covers profit sharing, decision-making, what happens if a partner wants to exit, and dissolution procedures.
Yes. Most partnerships can have up to 20 partners. For professional partnerships (e.g. accounting or legal firms), higher limits apply. The Partnership Agreement should clearly define each partner’s ownership percentage, capital contribution, and profit share.
In most cases, no. A company provides asset protection through the corporate veil, a flat 25% tax rate for small businesses, and clearer ownership and succession structures. A partnership may be appropriate for very simple, low-risk arrangements — but for any business intending to grow, hold assets, or employ staff, a company or trust structure is usually preferable. We cover this comparison in the consultation.
Partners pay tax at individual marginal rates on their share of partnership income: $0–$18,200 (nil), $18,201–$45,000 (16c per $1 over $18,200), $45,001–$135,000 ($4,288 + 30c), $135,001–$190,000 ($31,288 + 37c), $190,001+ ($51,638 + 45c), plus the 2% Medicare Levy. Source: ATO — Tax rates for Australian residents.
60 minutes. Tailored to your situation. Formal written service proposal included.
✓ No obligation to proceed · Fee credited to implementation if you engage
