Home' Border Enterprise : Autumn-Winter 2011 Contents enterprise
Vol 4. Autumn/Winter
WHAT is a
of a business.
They have the same goals and
are equally responsible for the
decisions made on behalf of the
Are all partners equal?
Not necessarily. For instance,
in many law firms there are senior
and junior partners. However, the
partners remain equal from a legal
point of view.
If there is no written agreement,
• share profts equally;
• cover losses equally, and
• take equal responsibility for the
business's activities and trading.
A partnership agreement is
usually a good idea, otherwise there
is no written record of the duties
and responsibilities of partners,
which can be very important if
there's a dispute later on.
If there is no written agreement,
the duties and responsibilities of
partners are equal, which may not
be what you want.
What does a partnership
It will cover issues like:
• the amount of money each
partner brings into the
• how the profts will be divided;
• the different roles and
responsibilities of each partner;
• the requirements to provide
• the rights of partners to draw
on bank accounts;
• how partners can leave
the partnership and the
consequences of this;
• what happens when the
business is sold;
• how disputes are handled;
• the salaries, and
• the rights of departing partners
to start a similar business etc.
Partners' unlawful acts
What if the partner does
something that is outside their
authority under the partnership
agreement? This depends
whether the person who dealt
with the partner knew (or should
have known) the action was
beyond their authority.
But even if this is so, it will
sometimes still be possible for the
person to claim compensation
from the partnership. The lesson
is clear: be very careful who
you accept into a business
Partners must file a Partnership
Return with the Tax Office.
It includes a profit and loss
statement, and the tax is paid
individually by partners on the
profits as part of their personal
Any partner can dissolve the
partnership provided they do it in
a way required by the partnership
Make sure you see a lawyer
about this, because there are
often certain legal formalities,
particularly in relation to the
formal notice that is required.
activity on the Border
is an indicator that
the local economy
is showing signs of
recovery from the effects of the
global financial crisis.
"Business conditions in the
Albury-Wodonga area are gradually
improving," according to Andrew
Hogan, managing partner at NAB,
"At NAB we've seen an increase
in enquiries from businesses looking
for asset finance and leasing of new
plant and equipment.
"I consider this as a 'green shoots'
phase and I am optimistic that our
economy is heading in the right
direction," he said.
Mr Hogan said that small
and medium-sized businesses
underpin the Australian economy
and, given the current conditions,
there are promising signs for local
"NAB has been in Albury for
150 years working with small and
medium enterprises, which are
the backbone of the Australian
"During this time we've forged
long term relationships with many
family businesses in the area, some
of which are second and third
"The key learning from working
with family businesses is the
need for succession planning. It
is important for family members
to invest time in discussing their
future plans to ensure that there is
a legacy for their heirs," Mr Hogan
"A formal plan should identify
and document such things as
who will lead the business, what
the business is worth, how the
handover will be carried out or
whether it is better to sell and in
what timeframe this will all take
place in. A changing of the guard
can bring instability but planning
helps keep this to a minimum.
"A proper plan also helps keep
the business on track from day-to-
day and leads to making the right
decisions in the future.
"Even if a succession plan is
not considered necessary, there
still needs to be a strategy for the
in-house or outside sale of the
business or ongoing management
of the concern, even if it is over a
period of time.
"At NAB we can assist
businesses in developing growth
strategies and supporting them with
professional advice on business
planning. We also encourage
them to seek guidance from other
advisors so that they get the full
"Simply put, good planning is the
recipe for future success,"
Mr Hogan said.
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