Back to KnowledgeBase

What happens if a partner leaves or joins, does the registration process have to happen all over again?

Legally, when the membership of a partnership changes, the old partnership is considered to have come to an end, and a new partnership to have begun (e.g., the partnership of X and Y acting together is a different thing to the partnership of X, Y, and Z acting together). The ATO generally states "If a partnership is reconstituted - that is, there is a change in membership through admission, retirement or death of members - the partnership will usually need a new TFN." However, "You do not need a new TFN and do not need to lodge two tax returns if a partnership has 20 or more partners and the change - under the reconstitution - represents less than 10% change in the beneficial interest of the partnership."
The situation with ABNs and GST is different again. In GSTR 2003/13, the ATO considers that, for GST purposes, "it is open and appropriate for the Commissioner to accept that a change in membership does not necessarily result in the general dissolution and winding up of the partnership", where the partnership agreement contains a "continuity clause" (i.e., a clause, express or implied, stating that the partnership continues even if there is a change in membership). Our partnership agreement contains such a continuity clause.

If this does occur, it is best to get advice at the time to do the best thing by the partnership - either see your solicitor or you could call the NTAA's Hotline on 1800 808 105.