1.1.P.85 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

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Last reviewed: 7 December 2009