Essay on Accounting for Partnership Business

2577 Words Jun 3rd, 2013 11 Pages
Table of Contents Introduction 1
Sole trader 1
Partnership 2
Company 2
Registration Process 3
Financial Report 5
Conclusion 10
References 11

Christina Adams and David Ng recently completed their professional accounting qualifications, registered as tax agents and obtained all the necessary individual licenses as well as professional registrations required to operate as individuals. To start a new business, it is crucial to choose an appropriate business structure and facilitate the efficient operation and management (Pendieton & Vickery, 2005). Through the comparison of the different business structures, Christina and David will choose the partnership as the form of business entity to commerce their new
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It is common in the fields of law and accounting. There are four essential elements for partnership: there must be a valid agreement between the parties ensuring the relationship; there must be a business being carrying on in accordance with Partnership Act; there must be two or more persons working in the business together although there may be silent partners who are not actively involved in the management; there must be a motivation to run the business so as to generate a profit, even if business is ultimately unsuccessful in making a profit (Pendieton & Vickery, 2005). The carrying on of a business may include a continuing activity over a period of time. Accordingly Christina and David can fulfill the above conditions and choose the partnership to conduct their business.
Registration Process
To conduct their business in a better way, registration processes and relative agencies involved in the formation of the partnership should be taken into account. To begin with, the basic registration requirements consists of applying for and Australian Business Number (ABN), which is an identifying number for dealing with the ATO and other government departments (Birt et al., 2012). Similarly, the partnership business need to register a unique number to increase the efficiency in administering tax called tax file number (TFN). The next step is that Christina and David need to elect to use a business name

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