Partnership As A Business Structure

The Partnership as a Business Structure

Partnerships are a popular trading structure. They have found their primary applications in the following situations:


  • where revenue losses are anticipated in the immediate or near term, and where those losses can be utilised by the partners at their personal level to offset against income from other sources (subject to the application of the “non-commercial business activities” in Div 35 of ITAA 1997)
  • in family businesses, where the relationship between the participants is relatively informal
  • professional practices, where the rules associated with the profession require the participants in the practice to contract in their own names, and not through other legal structures
  • where one or more of the partnership assets is likely to increase in value, and therefore the ability to access the 50% CGT discount on the disposal of the assets is important to the partners
  • where there are more than two equal participants in the business and the partners are likely to be able to qualify for the various CGT small business concessions


  • Less flexible – income split as per partnership agreement
  • No succession planning – when one partner dies, the partnership ceases to exist

FORSYTHS have extensive experience in the operations of a business through a partnership structure and should be consulted on the following to ensure the business is correctly established.


Company Sole-trader Trust Succession Planning