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When two or more people agree to go into business together, they've created a general partnership. You don't have to file paperwork with the state to start a general partnership, but we can help with other important steps.
A general partnership is created any time two or more people agree to go into business together, whether or not they have a written contract. It's a good idea to formalize the details in a partnership agreement that specifies each partner's rights, responsibilities, and share of the profits.
Once partners are engaged in a business, each partner is personally liable for the actions of that business, including the obligations of the other partners. There are no shields against personal liability.
A general partnership doesn't pay income taxes. Instead, profits and losses flow through to each of the partners, who are responsible to report it on their personal income tax returns.
It's easy to create a general partnership. But there are some steps you should consider before opening for business.
If you want to operate the business under a different name, you'll need to register a DBA ("doing business as") name, also known as a fictitious name, assumed business name, or trade name.
To operate your business legally, you may need to obtain permits or licenses from your city, county, and state. We can help you figure out which business licenses are right for you.
General partners are personally liable for the business, including the actions of the other partners. If liability protection is important to you, consider whether a limited liability company (LLC), corporation, limited partnership (LP), or limited liability partnership (LLP) might be better for your needs.
Before you can open a business bank account or hire employees, you'll need an employer identification number, or EIN, from the IRS.
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