Partnership - Ask An Expert

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))

Sort by:

Partnership
14th Oct, 2009

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

Partnership
20th May, 2009

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

Medici Capital provides a full Partnership Facilitation service. This includes assistance with the preparation of both Partnership and Management Agreements.

Technically you can enter into partnership without an agreement. However, this is very risky! We do not recommend it and it is likely to cause problems later.

The courts will assume an equal partnership exists.

We strongly recommend you seek professional financial and legal advice. Contact Medici Capital to…read more

Partnership
1st Sep, 2008

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 partnersh…read more

Partnership
27th May, 2008

Due to increasing business size and value, and the need for succession planning, owners with viable businesses are seeking junior partners to join them. Likewise up and coming pharmacists wish to own larger businesses.

Such sales of equity will necessitate the development of industry-accepted principles and finance approaches for succession.

Practices have used multi-practitioner professional partnerships to attract appropriate staff and rewared specialised skills. Pharmac…read more

Request A Valuation

Medici Events

Medici Capital Services: