Partnership set-up

Partnership set-up

How to set-up partnership

Even though it is not compulsory, we strongly recommend set up a Partnership Agreement in writing before you start the partnership business.

  • Decide on partnership name, address, date and type of business

  • Decide on number of partners - Not more than 20 partners. There are some restrictions contained in the Corporations Regulations 2001 (Cth).

  • Who are going to be partners – Partners can be individuals or 2 or 3 individuals acting as joint trustees of a trust or companies

  • Decide how much initial capital each partners are contributing to the partnership

  • Decide what proportion of the partnership will each partners own

  • Decide how to distribute profits among partners

  • Decide on Partnership liability – How liability is going to be apportioned between the partners

  • Plan for terminating the partnership

Terminating the partnership/buyback

There might come a time where one partner wants out. In this case, there are a number of possibilities:

  • If a partnership is created for a particular purpose, then after the purpose is achieved or abandoned, the partnership dissolves

  • If a partnership is created for a fixed period, then after the period is over, the partnership dissolves

  • Once a partner resigns from a partnership or dies, the partnership is considered to be terminated

  • If there are still partners remaining then they will be treated as partners in a new partnership

  • If a partnership is engaged in unlawful activities, it will be dissolved by the law.