Wednesday, September 22, 2010

New to Cleardocs – Partnership Agreement

Danni Kirwan, Marketing Executive

Over the past few months the team at Cleardocs (with some help from Maddocks), have been working hard on our latest product launch – the Partnership Agreement. The Partnership Agreement costs $198.00 and includes the agreement and all relevant minutes.

The Partnership Agreement was developed based on customer feedback. Some of you may remember completing a short survey about the types of Partnerships you or your clients use earlier this year. Many Cleardocs products are the result of customer feedback and suggestions, so if you have any suggestions for new products we would love to hear them.

What is a Partnership Agreement?

A Partnership Agreement sets out the rules under which a partnership must act. Unless there is an agreement in place all Partners are equal, and must share profits and cover losses equally. An Agreement allows the partners to record, amongst other things:

· How profits will be shared

· How much money each Partner brings to the Partnership

· How new Partners can join the Partnership

· How partners can be removed from the Partnership; and

· The different roles and responsibilities of each partner

Why should I consider a Partnership Agreement?

As I mentioned above, unless you have a partnership agreement documenting the different roles and responsibilities of Partners, it is assumed that Partners are equal. In reality however, many Partnerships are unequal. Some Partners may be entitled to a larger share of profits because they have contributed more to the Partnership, and some Partnerships may have varying roles and levels of responsibility dependant on the expertise and involvement of the Partners.

Over time these factors or the nature of the Partnership may change, so it is wise to have a written agreement to avoid future disputes.

What’s the difference between a Partnership and a company?

First and foremost, a company is a separate legal entity that needs to be registered with ASIC. A Partnership is not a legal entity, but you will need to register the business name you wish to trade with and apply for an ABN and GST (if applicable).

A company is required to pay tax at the company rate of 30% and lodge a separate tax return, whereas Partners in a Partnership pay tax on their earnings individually and at their own tax rate.

Companies need to be registered with ASIC, and pay ongoing annual review fees. Acting as a Company Director brings with it legal responsibilities, but also offers limited liability protection (hence the term “Proprietary Limited”). In the case of a Partnership, the Partners may be held personally liable for liabilities.

Where can I find out more?

Cleardocs can establish both Partnership Agreements and Company Registrations. If you are considering starting a business, you may wish to get some advice to determine the right structure for you. To find out more about the Cleardocs Partnership Agreement click here to view the product page. If you would like to know more about registering a Pty Ltd Company, click here.

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