Partnerships in Tasmania

By James Stevens, Director and Solicitor, Go To Court Lawyers. Last reviewed 15 April 2026.

In Tasmania, the rules that govern partnerships are set out in the Partnership Act 1891. The Act defines a partnership as a business that is carried on by a group of people in common with a view to make a profit. There are three kinds of partnership that can be formed in Tasmania and two of these must be registered with Consumer Affairs and Fair Trading in order to be validly created. This page deals with partnerships in Tasmania.

Normal or general partnerships

Normal or general partnerships are the most common kind of partnership. They do not need to be formed under a written agreement or be registered in order to be valid. Instead, the Partnership Act 1891 provides guidance on the factors that determine whether a partnership exists. For example, if a person receives a share of the profits of a business carried on with another person, that is evidence of a partnership. Other relevant factors include whether any property is held jointly between persons, and whether gross returns are shared by the partners.

In a normal or general partnership, the partners are jointly liable for the debts of the partnership that are incurred while they are a partner.  Each of the partners can bind the partnership as its agent - for example, by raising debt for the partnership.  The partners can also vary their mutual rights and duties by consent.

Limited partnerships

A limited partnership is a partnership that consists of both general partners and limited partners. 

General partners share responsibility for all the debts of the partnership but have full control over the management of the business of the partnership.

Limited partners cannot take part in managing the business of a partnership and cannot bind the partnership as its agent. Their liability is limited to a specific amount, which is referred to for each partnership in the register of limited partnerships kept by Consumer Affairs and Fair Trading.  Limited partnerships must have at least one general partner and at least one limited partner, but generally cannot have more than 20 general partners.

Similar to normal or general partnerships, a limited partnership is not required to have a written agreement, but it does need to be registered with Consumer Affairs and Fair Trading.

Incorporated limited partnerships

Incorporated limited partnerships are a type of partnership that exists to encourage investment in venture capital projects (i.e. high growth projects).  Unlike in a limited partnership, limited partners in an incorporated limited partnership have no liability for the debts of the partnership. This is to encourage venture capital investors to invest in the partnership without having to take on debt risk.

An incorporated limited partnership can have any number of limited partners but a maximum of 20 general partners (subject to an exception). Incorporated limited partnerships are required to be registered with Consumer Affairs and Fair Trading. They must also have a written partnership agreement at all times.

Limited partnerships are bodies corporate, meaning they have a separate legal identity from their partners. Limited partners cannot take part in the management of the business.

Dissolving a partnership

There are specific rules for how different types of partnership can be dissolved. 

All partnerships other than incorporated limited partnerships are dissolved at the end of a fixed term if they were only established for that term. Partnerships will also generally dissolve as a result of the death or bankruptcy of a partner.  The Supreme Court of Tasmania can also dissolve a partnership on application by one of the partners under certain circumstances. 

Incorporated limited partnerships need to be wound up in accordance with the Partnership Act 1891.

Taxation of partnerships

Normal or general partnerships are generally not taxed as an entity.  Instead, each of the partners in the partnership includes a share of the profits of the partnership in their individual income tax return.  The partnership still lodges a return to prove its income.

Certain limited partnerships are taxed in the same way as a company, which may have tax advantages.  Because incorporated limited partnerships are generally set up for venture capital projects and may be registered as venture capital limited partnerships, they might be taxed in the same way as normal or general partnerships.

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