1.1.P.95 Partnership

Usage

This definition applies to all payments.

Definition

For the purposes of income and assets assessment, a partnership is the relationship which exists between people carrying on business in common, with a view to making a profit. A partnership agreement may be oral OR written.

The business MAY be run:

  • in the owners' name/s, OR
  • under a registered business name.

The business is NOT a separate legal entity, which means that although the partnership lodges a tax return, the profit or income is assessable in the hands of the individual partners.

Each partner:

  • owns an agreed portion of the business assets,
  • receives an agreed portion of the profits, and
  • is 'jointly and severally' liable for all business debts (see explanation).

Explanation: If one partner defaults, the other/s are liable for all the business debts.

Policy reference: SS Guide 4.7.1 Assessing the Income & Assets of Sole Traders & Partnerships

Last reviewed: 6 February 2017