MAA103 Lecture Notes - Lecture 1: Integrated Reporting, Pay-As-You-Earn Tax, Vicroads
Document Summary
Part(cid:374)erships are si(cid:373)ple a(cid:374)d i(cid:374)e(cid:454)pe(cid:374)si(cid:448)e to operate, a(cid:374)d the(cid:455) offer great fle(cid:454)i(cid:271)ilit(cid:455) i(cid:374) ter(cid:373)s of ho(cid:449) a business could be organized. Because partners are taxed on their share of business profits, partnerships thus have tax advantages over a company (if profits are below 250k). All partners are fully responsible for the debts of the business, and for damages, if a client is harmed in some way. There is no way for partners to limit their business risk. A company however has the ad(cid:448)a(cid:374)tage of (cid:858)li(cid:373)ited lia(cid:271)ilit(cid:455)(cid:859) yet it is still more expensive to establish and has to comply with more rules and regulations. A partnership agreement that details all key aspects of the business relationship, such as how profits are shared and what each partner would contribute in terms of capital and time must be drawn up by a lawyer. A partnership has to lodge an income tax return with the ato each year and comply with taxation laws.
