Partnership

A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business undertaking in which all have invested. Partnerships are often favoured over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it is distributed to the partners (i.e. there is no dividend tax levied). However, depending on the partnership structure and the jurisdiction in which it operates, owners of a partnership may be exposed to greater personal liability than they would as shareholders of a corporation.

Summarising s. 5 of the Partnership Act 1958 (Vic) (hereinafter the 'Act'), for a partnership in Australia to exist, four main criteria must be satisfied. They are:

  • Valid Agreement between the parties;
  • To carry on a business - this is defined in s.3 as 'any trade, occupation or profession';
  • In Common - meaning there must be some mutuality of rights, interests and obligations;
  • View to Profit - thus charitable organisations cannot be partnerships (charities are typically incorporated associations under Associations Incorporations Act 1981 (Vic))

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Funding Requirements for A Pharmacy Partnership

My enquiry is about whether the levels of debt in my real estate investments are likely to adversely affect my intentions to buy into a pharmacy partnership. I am currently contemplating whether to use the equity growth in my first investment property and some savings to buy a second property. If I were to do so it I would be borrowing 90% of bank valuation for both properties and would have limited savings left over. My plan would be to continue to patiently wait for a pharmacy partnership to appear and if necessary use some family money (if there is insufficient available equity at the time) to raise the $50-$150k that I’m told is required by the banks to enter the partnership

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Devil is in the Detail - Documentation & Implementation

I am often amazed at the number pharmacy partnerships that do not have a partnership agreement. Yes, I often find that many pharmacists have not executed a partnership agreement. Their lawyer or accountant may have prepared the agreement, but they "just didn't get around to signing it".

The devil is in the detail.

We recommend a Partnership Agreement to address the legal and protection issues and a Management Agreement to address the active and business development or management issues.

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What is valid agreement for partnership

Hi there, Can someone declare that one is a partner in a business without going through proper formalities like signing documents and understanding liabilities etc? Would you please provide what are the forms of valid agreements for a partnership to occur

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Benefits of a Junior Partner In Pharmacy

With the average value of pharmacies today at well over $2 million dollars, the rising cost of debt and the looming change in pharmacy ownership over the next 5-10 years, junior partnerships are arising as a more likely ownership solution for young pharmacists. In a period of declining margins, increasing reliance on customer care and commercial competency, a partnership can provide an owner with mentorship opportunities.

Practices have used multi-practitioner professional partnerships to attract appropriate staff and reward specialised skills. Pharmacists, like other professionals, are seeing the evolution in the admission of junior partners. Also, with almost 60% of existing practitioners ready to retire in the next 10 years, partnerships will become a practical way for the profession to retain their skills.

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Benefits of a Junior Partner In Pharmacy

With the average value of pharmacies today at well over $2 million dollars, the rising cost of debt and the looming change in pharmacy ownership over the next 5-10 years, junior partnerships are arising as a more likely ownership solution for young pharmacists. In a period of declining margins, increasing reliance on customer care and commercial competency, a partnership can provide an owner with mentorship opportunities.

Practices have used multi-practitioner professional partnerships to attract appropriate staff and reward specialised skills. Pharmacists, like other professionals, are seeing the evolution in the admission of junior partners. Also, with almost 60% of existing practitioners ready to retire in the next 10 years, partnerships will become a practical way for the profession to retain their skills.

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