• Legal database
Legal database
Disclaimer
This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4.

Edited version of your written advice

Authorisation Number: 1012771628078

Ruling

Subject: Entity Classification

Question 1

Is Entity A a company as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

Yes.

This ruling applies for the following periods:

Income year ended 30 June 2015

Income year ended 30 June 2016

Relevant facts and circumstances

    1. Entity A is an entity that was established under foreign law.

    2. Entity A has separate legal existence.

    3. Entity A has the ability to continue in existence indefinitely.

    4. Entity A will keep its identity regardless of changes to its membership.

    5. Entity A has the power to act, hold property, enter into legal contracts, sue and be sued in its own name.

    6. Entity A is neither a partnership nor a non-entity joint venture.

    7. Entity A is not a 'resident of Australia' as defined in subsection 6(1) of the Income Tax Assessment Act 1936.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 995-1(1)

Reasons for decision

The term 'company' is defined in subsection 995-1(1) of the ITAA 1997 as meaning:

    (a) a body corporate; or

    (b) any other unincorporated association or body of persons;

    but does not include a partnership or a non-entity joint venture.

Paragraph 30 of Miscellaneous Taxation Ruling MT 2006/1: The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number states:

    30. 'Body corporate' is not a defined term. The term takes its meaning from the general law. 'Body corporate' is a general term to describe an artificial entity having a separate legal existence. A body corporate has the ability to continue in existence indefinitely and to keep its identity regardless of changes to its membership. It also has the power to act, hold property, enter into legal contracts, sue and be sued in its own name, just as a natural person can.

Therefore, in order for an entity to be a body corporate it must show the following characteristics:

    • A separate legal existence;

    • Ability to continue in existence indefinitely;

    • Keep its identity regardless of changes to its membership; and

    • Power to act, hold property, enter into legal contracts, sue and be sued in its own name.

Entity A has the characteristics of a body corporate. Entity A is not a partnership or a non-entity joint venture. As such, it fits within the definition of company in subsection 995-1(1) of the ITAA 1997.


Back to top