This is regulated by the Corporations Act 2001 (Commonwealth). Usually, the maximum number of partners is limited to 20. However, for some professional partnerships this can be up to 1000. For example, actuaries, medical practitioners, share brokers, trademark attorneys, and scientific research partnerships can have up to 50 partners. Partnerships comprising of accountants can have up to 1000 partners. For your specific industry, you should refer to the Corporations Act, as mentioned above. 

A partnership agreement is not required by law when you establish a partnership, but it is highly recommended, and the Australian Taxation Office (ATO) will almost always want to see a copy of a partnership agreement to evidence its existence.

Partnership agreements constitute evidence that the parties intend to operate as a partnership, and also detail how assets are owned, in what proportion each partner has contributed assets or finances, rules around joint liability, agreement over control of the partnership, how profit is to be distributed, among other things.

Without a partnership agreement, you open yourself up to disputes among partners in the event things go wrong, as well as increase your financial risk.

The cost of a partnership depends on the scale and complexity of your business. For a small family partnership, for example a husband and wife, it may be quite simple to arrange and relatively low cost. If you are looking to establish a professional partnership, there will be increased costs associated with drafting a partnership agreement that suits all partners, as well as ensuring that any professional fees and licenses are obtained, and compliance with any industry specific regulation of partnerships is achieved. That said, a partnership generally has far lower establishment and ongoing management costs than other business structures such as companies and trusts. 

No. Partnerships are not separate legal entities and therefore cannot hold property or other assets in their own right. In the event that the partnership cannot repay its debts, then your personal assets may also become vulnerable to claims by creditors.

This is different to a trust, where property is transferred to a trustee, who holds the property 'on trust' for the benefit of a range of beneficiaries. Since the beneficiary does not technically own the legal title to property, it is unlikely that the property would become vulnerable to attack in the event that a beneficiary is made insolvent or bankrupt. 

Generally, dissolution of a partnership requires the consent of all partners. Alternatively, a partnership can be dissolved if:

• it has become illegal
• a partner dies or becomes bankrupt
• a court order has been given to end the partnership
• the lifetime of the partnership has expired

Unlike when operating as a sole trader, you will not have complete independent control over the business. Once you establish a partnership, you will generally have control over the management of the business as one of many partners. Partnership law gives each partner equal rights over the management and decision making, unless this is varied by the partnership agreement. Decisions will often need to be made unanimously, or as a majority. Conflict and friction can arise in partnerships where not every partner is united towards a common goal. However, partners are also obliged to act in the best interests of the partnership, which eliminates some of the concerns about differences in management approach or decision making. 

Whilst there are rules for partnerships, they are far less onerous than those for companies. Partnerships are usually more informal arrangements than companies. You are not required to maintain minutes, hold general meetings, elect any officers, engage in share dealings, or file annual financial reports. Most of the rules governing partnerships will be found in the Partnership Act for your relevant state, and in the partnership agreement which you draft when establishing your business.  

No. A partnership structure is not easy to change after you have operated as a partnership originally. Often there are many different parties involved, which may be resistant towards a change to other structures that would provide them with less control. It is also more difficult to transfer partners in a partnership than it is to transfer shares in a company, for example.

Any change to business structure after a business has been in operation for some time will usually be quite complex, and costly. It is always best to develop a long term business plan for the future of your business, and choose a structure from the start that will provide you with the flexibility you need to adapt efficiently to changing circumstances. 

Whilst the partnership agreement can be drafted in a way that allows income to be split between different partners on an annual basis, a discretionary trust will generally offer more flexibility.

In a partnership, partners hold their interest in the assets and income of the business in set proportions. However, in a discretionary trust, the trustee has absolute discretion as to who he distributes in come to, in what amounts (if at all), and when. This will generally provide greater flexibility and opportunities for tax minimisation than a partnership arrangement. This is particularly the case in family business scenarios. 

Yes. A partner can usually leave the partnership at any time. There are also instances where a partner will be required to leave, or their share required to be sold, as in the case of death, and sometimes divorce or bankruptcy. How this occurs, and what is required for this to happen, should be determined by the terms of your partnership agreement. These provisions will simply govern the rules around buying and selling a partnership interest.