• How does a closely-held corporate limited partnership calculate its distributable surplus?

    A private company's distributable surplus for an income year is worked out as follows:



    Net assets


    Division 7A dividends




    Paid up share value


    Repayments of non-commercial loans

    A closely-held corporate limited partnership is treated as if it were a private company for the purposes of Division 7A. For the purposes of the formula, 'net assets' means the amount of the partnership's assets at the end of the partnership's year of income (according to its accounting records) that exceed the sum of the present legal obligations of the partnership and amounts relating to the following provisions:

    • provisions for depreciation
    • provisions for annual leave and long service leave
    • provisions for amortisation of intellectual property and trademarks.

    'Paid up share value' is the paid up share capital of a company at the end of its year of income. For a closely-held corporate limited partnership this is a reference to the total of the partners' interests in the partnership (because a reference to a share includes a reference to an interest in the partnership).

    For more information on net assets and how to calculate the distributable surplus refer to the fact sheet Division 7A - distributable surplus.

      Last modified: 15 Jul 2010QC 23184