House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 9 - Rules for certain entities

Outline of Chapter

9.1 This Chapter explains the special rules that apply to partnerships and unincorporated associations or bodies of persons. These rules are in Part 12 of the PGBA Bill.

9.2 The effect of these rules is to impose separate obligations on certain entities if other entities have obligations under this Bill or the TAA1953.

Detailed explanation of Part 12

9.3 An entity for the purposes of this Bill and the TAA 1953 includes partnerships and unincorporated associations or bodies of persons [clause 5 definition of entity] . This definition draws on the definition of 'entity' in section 37 of the A New Tax System (Australian Business Number) Act 1999 .

Treatment of partners in a partnership

9.4 This Bill, entitlement Acts and the TAA 1953 will apply to partnerships as if it were a person, but with the following changes [subclauses 51 (1) and (6)]:

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because a partnership is not a separate legal person, obligations imposed by this Bill, an entitlement Act or the TAA 1953 on a partnership are imposed on each partner, but may be discharged by any of the partners [subclause 51(2)] ;

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partners will be jointly and severally liable to pay amounts payable by the partnership [subclause 51(3)] ;

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any offences committed by the partnership will be taken to have been committed by each partner who aided, abetted, counselled or procured the relevant act or omission or was knowingly concerned or a party to that act or omission [subclause 51(4)] ; and

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a change in the composition of the partnership does not affect the continuity of the partnership [subclause 51(5)] .

Treatment of unincorporated associations

9.5 This Bill, entitlement Acts and the TAA 1953 will apply to an unincorporated association as if it were a person, but with the following changes [subclauses 52(1) and (4)]:

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obligations that would be imposed on an unincorporated association or body of persons are imposed on each member of the committee of management of that association or body, but may be discharged by any of those members [subclause 52(2)] ; and

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any offences committed by the association or body will be taken to have been committed by each member of its committee of management who aided, abetted, counselled or procured the relevant act or omission or was knowingly concerned or a party to that act or omission [subclause 52(3)] .