• Identifying your entity type

    It is important to identify your entity type so you can work out whether or not you are conducting your activities as an enterprise.

    Depending on your entity type and the activities you conduct, you may be carrying on an enterprise for GST purposes (see Conducting activities as an enterprise).

    Attention

    Many types of entities conduct racing activities, but this guide only provides information about some entity types. You should contact us for assistance if you are uncertain of your exact entity type.

    End of attention

    An entity can be any of the following:

    There may also be groups that include entities of more than one type:

    Individual

    An individual is a person and is an entity in their own right.

    Partnership

    For GST purposes, a partnership is an association of persons that:

    • carry on a business as partners, or
    • receive income jointly.

    A partnership for GST purposes is the same as that for income tax purposes (see Indicators of a partnership).

    Attention

    Any GST obligations of a partnership are shared equally by all partners; however the obligations may be discharged by any of the partners.

    End of attention

    Company

    A company is a legal entity separate from its shareholders. For GST purposes, a company means a body corporate or any other unincorporated association or body of persons, but does not include a partnership or non-entity joint venture.

    Unincorporated association or body of persons

    Generally an unincorporated association or body of persons is a group of people who do not have the protection of limited liability, but have a common purpose or goal.

    Your group may be an unincorporated association or body of persons if some of the following indicators are present:

    • there are members of the association
    • there is a contract binding the members amongst themselves
    • there is a moment in time when a number of persons combined to form the association
    • there is a constitutional arrangement for meetings of members and for appointing officers
    • members are normally free to join or leave the association
    • the association normally continues to exist independently from any change to the composition of the association
    • there is a separate bank account and financial records for the association.

    You can use these indicators to work out if your entity is an unincorporated association or body of persons.

    Attention

    Any GST obligations of an unincorporated association or body of persons are shared equally by each member of the committee of management of that association.

    End of attention

    Racing syndicates

    In the racing industry it is common for a group of persons to form a syndicate. The structure of a syndicate and the provisions of syndicate agreements vary from case to case.

    In some cases, a syndicate may meet the partnership definition for income tax purposes because they are in joint receipt of ordinary income (for example, prize money), in which case the partnership is the entity for GST purposes.

    Alternatively, a syndicate may form a company. This may be the case for syndicates with large numbers of members/shareholders.

    Attention

    You will need to determine your entity structure based on your syndicate agreement.

    End of attention

    More than one entity supplying an animal

    It is possible for more than one entity to supply the same racing animal. In such cases, each entity needs to consider their entitlement to an Australian business number (ABN) and GST registration.

    Attention

    In some cases, some members of the group supplying the animal may be registered or required to be registered for GST, while others may not.

    End of attention

    Example: Supply by more than one entity

    Six friends with an interest in racing lease an animal to race. They engage a trainer to train and prepare the animal for racing. They open a joint bank account from which all expenses are paid.

    If the group is not a partnership, the absence of the other indicators of an unincorporated association or body of persons would indicate the ownership group will not be a single entity.

    In this case, there are six individuals, each supplying their interest in the animal to race.

    In the racing industry, the supplier of an animal for racing or breeding may be one entity (for example, an individual or a partnership) or multiple entities (for example, several individuals). Each case involving multiple entities needs to be carefully considered to work out if they are one entity conducting their racing industry activities.

    End of example
      Last modified: 24 May 2014QC 18093