Issue
Can the Commissioner register a partnership for an energy grant under section 9 of the Product Grants and Benefits Administration Act 2000 (PGBAA) if one of the two partners of the partnership has died and the ultimate residue of the partnership's estate has been distributed?
Decision
No. The Commissioner cannot register a partnership for an energy grant under section 9 of the PGBAA if one of the two partners of the partnership has died and the ultimate residue of the partnership's estate has been distributed.
Facts
A client was a partner in a two-person partnership in which the other partner is deceased.
The partnership has never registered for the Energy Grants (Credits) Scheme (EGCS).
The surviving partner wishes to register for EGCS and claim for fuel which was purchased and used by the partnership in activities eligible for an energy grant.
All of the remaining assets of the partnership have been sold off, any liabilities have been paid out, the surviving partner and the trustee of the deceased partner's estate have received their final payments, the partnership is not owed any money, and all bank accounts have been closed.
Reasons for Decision
Under section 9 of the PGBAA the Commissioner must register 'you' for an energy grant if you meet certain eligibility requirements.
In accordance with section 5 of the PGBAA 'you' applies to entities generally, unless its application is specifically limited.
Under subsection 51(1) of the PGBAA a partnership is treated, for the purposes of that Act and the entitlement Acts as if it were a person.
The Partnership Act of each state and territory provides: Subject to any agreement between the partners, every partnership is dissolved as regards all of the partners by the death or bankruptcy of any partner upon the death of a partner.
and that: After the dissolution of a partnership the authority of each partner to bind the firm, and the other rights and obligations of the partners, continue, notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the partnership, and to complete transactions begun but unfinished at the time of dissolution, but not otherwise...
The restriction on the partners' authority is for the purposes of winding up the affairs of the partnership and to complete transactions begun but unfinished. The partner may not begin new transactions in the exercise of their rights after dissolution of the partnership.
The dissolution of the partnership is taken to have occurred once the partnership's affairs have been finalised and the ultimate residue of the partnership's estate has been distributed.
In this instance, all of the remaining assets of the partnership have been sold off, any liabilities have been paid out, the surviving partner and the trustee of the deceased partner's estate have received their final payments, the partnership is not owed any money, and all bank accounts have been closed. Consequently, the ultimate residue of the partnership's estate has been distributed.
Therefore, the partnership is dissolved and no longer exists as a person or entity for the purposes of the PGBAA.
Accordingly, the Commissioner cannot register a partnership for an energy grant under section 9 of the PGBAA as there is no legal entity to register.