My sister and I are looking to start a cafe should we make a partnership agreement or incorporate?

The main types of business structures commonly used by small businesses are:

• Sole trader
• Partnership
• Trust
• Company

Usually, families and friends prefer to enter into partnership at the start of the business. It provides the more resources and minimises the chance of failure. It also provides the tax advantages and avoids the legal complication as involved in the formation of the company .The partnership law gives strength to the partnership agreement and ensures that the partner cannot compete with the business in which he is a partner. If any partner carries on the same business then he is liable to pay all the earned profits from that business to other partners. 

On the other hand corporation always involved a lot of risks. At the initial sage of business, it does not seem to be a practical idea for the small businesses because you need more funds at the start of the business. It also involves a lot of legal requirements and tax issues.

So, you need a partnership agreement australia to form a partnership. Partnership is made between two or more partners to run a business in order to earn a profit. Partnership is always bas to earn a profit.

What is partnership law in Australia?
In Australia, each state has separate partnership Acts. Such as:

• ACT -  Partnership Act 1963
• NSW - Partnership Act 1892
• NT  -  Partnership Act 1997
• QLD - Partnership Act 1891
• SA  - Partnership Act 1891
• TAS - Partnership Act 1891

It is the not a legal requirement that partnership agreement must be in written form. It can be verbal. However, partners prefer written agreement in order to avoid disputes. The courts also give importance to the written agreement because it very hard to prove the intention of other partner on the basis of verbal agreement. The partnership agreement can only be amended by the consent of the all partners. Partnership is a valid and binding agreement. It is the duty of the all partners to fulfil their obligations. No more than twenty partners can be involved in a partnership.

Partnership at Will
If the partnership agreement does not specify the term of agreement, is called partnership at will. The other partner can retire from the partnership agreement by providing the notice to other partner if there is no specify period of the agreement.

Advantages of Partnership
There are multi benefits of partnership. Such as:

• Tax advantages
• Share of loss
• More available funds
• Easy to administer
• Share of risk
• Cheaper and inexpensive
• More partners to share liabilities

The partnership agreement must be signed by the both partners. Each partner must read careful the all provisions of the agreement. Every business has pro and cons but you must choose that business structure that best suits with your business requirements.

Features

• Very flexible to suit most situations;
• Suitable for any type of business;
• Calls for compliance with non-discrimination and other policies;
• Suitable for partnerships of up to ten or more people;
• Very extensive guidance notes

Net Lawman provides the following types of partnership agreements. Such as

Business partnership agreement 

This partnership agreement is suitable for all Australian partnership situations, whether you are architects, car sellers, farmers or builders.  Having a partnership agreement in place is essential as it sets the terms for a sound business relationship.

Family partnership agreement

This partnership agreement is suitable for most partnership situations, whatever the business type. It matters not whether you are car salesmen, architects, cleaners, or accountants. It is less formal than many such agreements as it has been drafted specifically for family partnerships of any kind

Admission of new partner

A simple agreement whereby the old and new partners are joined in the terms of the original partnership deed.