Each partner must obtain their own Tax File Number (TFN) and Australian Business Number (ABN). Partnerships can be established through a verbal agreement or a written contract, though it’s advisable to have a written agreement to safeguard all parties in the event of disputes or legal issues.

Partners bear responsibility for the business’s debts and liabilities and are legally accountable for the actions and obligations of their fellow partners. Unlike corporations, partnerships do not pay tax on their income. Instead, tax obligations are distributed equally among all partners, who pay taxes on their respective shares of the business.

In a partnership, you’ll need to file a tax return for the business in addition to an individual return as a partner. This facilitates the separation of business expenses and deductions from personal expenses. While certain deductions may not be available to the partnership, individual partners may still be eligible to claim them.

As a partnership, you are responsible for deducting income tax from employee wages and fulfilling any superannuation obligations. If your business generates an annual income exceeding $75,000, you must collect and remit Goods and Services Tax (GST). Additionally, you are required to submit your Business Activity Statement (BAS) according to the schedule mandated by the Australian Taxation Office (ATO).