Have enough savings in your account and are looking forward to something productive to utilise them the right way?
If you are thinking of starting an investment partnership, let us brief you with what exactly an investment partnership is. Basically, an investment partnership consists of a partnership that brings in an offer of different tax benefits and not only that but also liability for people who are a part of and involved in this partnership. It is a kind of partnership in which at least 90 per cent of the assets are investments in bonds, stocks, and somewhat similar intangible assets. Other than that, at least 90 per cent of its income is obtained from such kind of assets.
It is immensely important for you to have complete knowledge about what exactly an investment partnership comprises of before you take such a big step. It is crucial to know that in this partnership, for all the partners involved, there is limited liability. It consists of a good proportion of sharing of debts which is based on the investment that is made by each partner into a particular business. In many cases, it often involves around one or two general partners and then also the limited partners that join in the future- although, they would only act as silent partners; they do not take part in managerial decisions. Only the former partners assist in managerial decisions.
So how does one start an investment partnership? Below are a few ways and steps that would help you in starting an investment partnership:
- Partnership agreement
You might already have some idea about what a partnership agreement is. No matter what kind of partnership one is planning to start, an agreement is an essential part of the entire process. Without a partnership agreement, there are high chances of disputes occurring in the future. In fact, the partnership might as well ultimately dissolve if a member leaves either due to retirement, death or any other reason. Hence it is a crucial part of initiating an investment partnership. It is important to remember that the agreement should consist of the duties and limitations of each partner, profits and losses, rules governing the distribution of the partnership, and the distribution of the partnership. A partnership agreement is mostly drawn up by a lawyer that is hired by the partners. Hence make sure that you get yours.
- ABN and GST
Another important step is to apply for an Australian Business Number (ABN) when starting a partnership. This step can be taken when you first register the name of your business or later on as well. Once you are done with that, you will also need to get the partnership registered for the GST.
The partnership should have its very own Tax File Number (TFN) that sums up the entire partnership. Also, make sure that each partner arranges his or her own superannuation. You might as well consult the Wingate Consumer Finance Service for this matter.
These steps should be taken very carefully when establishing a partnership agreement. Most importantly, do not forget that a confidentiality clause is essential within the partnership agreement; it should be signed by among the partners. Follow these steps and you are good to go.