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Five tax advantages and benefits of registering a Partnership

by , 24 July 2015
If your business has more than one, but less than 20 partners, a partnership is the way to go!

A Partnership isn't only cheaper and easier to set up. But you can get a Capital Gains tax exemption of R30 000!

Also, do you want to tender for government work?

Government gives more tenders to Partnerships than any other entity. So you'll benefit by being eligible for tenders without the administrative burden attached to trading as a CC or company.

This is just one of the many benefits and tax advantages of a Partnership.
Read on for four more tax advantages and benefits of registering a Partnership.


139 ways for your business to legally pay less tax.

Here are the first five (for example)...
  • The 22 little known allowances that you could deduct so you pay less tax
  • The 7 expenses you incur for legal activities that you can claim deductions on
  • A 3-point checklist that guarantees the repairs you make to your office, machinery or tools will qualify as a deduction
  • The 3 ways to deduct your bad debts
  • Seven expenses to always include in your travel claim to maximise your tax savings

But wait.

Deductions aren't the only way to reduce your tax bill. Here's another completely legal strategy...


Partnership gives you four more advantages over the other entities:

  1. There are very few formalities to follow when you set up a Partnership. But I suggest that you set up a Partnership agreement to govern the internal agreements between your partners;
  2. You don't have to make use of a registered accountant to do your books or have a full audit done. But, you still have to keep proper accounting records. Especially if you want to register for Vat;
  3. Your start-up and admin costs are lower than starting to trade as a CC or company; and
  4. As an added bonus you don't need to submit Annual Returns to CIPC. So you save money!

Read on for the four tax benefits of a Partnership


Draw up your financial statements perfectly and get rid of errors in your accounting records!

Admit it. Every time you have to prepare your financial statements you get that sinking feeling. A sense of unease.

It's to be expected, given the importance of such a task.

  • If your trial balance has errors, your financial statements will also be incorrect;
  • You use your balance sheet to declare your taxes to SARS annually – so it must be correct;
  • Your financial statements give a picture of the economic activity of your company; and
  • Your company won't be compliant with the laws and regulations in South Africa, if you don't prepare your income statement and balance sheet, and do them correctly!

But don't despair. We'll help you tackle the problems in drawing up an income statement and balance sheet with this one tool. Click here to learn more.


Four ways you can pay less tax!

  1. Each partner discloses the income and expenses on their private income tax return and disclose what percentage of it they used;
  2. Each partner is entitled to the personal tax threshold, meaning the first R70 700 of your taxable income. And each partner is entitled to the Capital Gains exemption of R30 000  in the their personal capacity;
  3. You work out the profit of you partnership and share the profits between your partners depending on their agreed percentage. So you only get taxed on YOUR percentage of the profit; and
  4. You include your partnerships income and expenses in your personal income tax calculation. You'll deduct your retirement, annuity contributions, deductible portions of medical expenses and donations. You'll offset medical tax credits against your tax.

P.S. Get your Vat number the same day! Here's an eleven step action plan you can follow to register for Vat and get it today...

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