Private ruling: Entity Classification
Published: March 2015
Ruling period: Income year ended 30 June 2015 | Income year ended 30 June 2016

Ruling: Q1: Is Entity A a company as defined in subsection 995-1(1) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes.

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: Summary: 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.