General Partnership Agreement - Create a General Partnership Online

When you decide to start a business together, we're here to help

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.

If you're considering a general partnership, our attorneys can answer your questions and guide you through your next steps.

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Is a general partnership right for you?

What is a general partnership?

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.

Liability

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.

Pass-through taxation

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.

Make sure you're ready for business

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.

Business Licenses

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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Common questions

What is a general partnership, and how do I enter into one?

A general partnership is created any time two or more people agree to go into business together. There's no legal requirement for a contract or written agreement when you enter into a general partnership, but it's best to formalize the details of the arrangement in a written partnership agreement.

What are some advantages and disadvantages of general partnerships?

General partnerships are easy to create and flexible to manage. Unlike corporations and LLCs, you won't have to file formation documents or annual reports with the state. The general partnership itself does not have to pay income tax.

However, general partners are personally liable for the business, including all debts and liabilities of the other partners. Because of this potential liability, general partnerships may have trouble attracting investors or buyers.

Learn more about the limitations of general partnerships.

Once I've entered into a general partnership, do I need to file for a DBA?

The name of a general partnership is simply the names of its partners. If you want to adopt another name for your business, then you will need to file for a "doing business as" name, also called a fictitious name, assumed business name, trade name, or just DBA.

If a business operates under a fictitious business name, then generally states require the business to register this name. This is as a protection to consumers: anyone doing business with a general partnership should be able to find out the names of the partners.

Do General Partnerships Require a DBA?

How are general partnerships taxed?

A general partnership does not pay any income taxes, although it may be required to file a tax return. Partnership income "passes through" the business to the partners. Each partner then reports his or her share of business profits or losses on an individual federal tax return.

Learn more about how to file partnership taxes.

How are general partnerships managed, and who is liable for the business?

Generally, the partners have equal authority to manage the business. However, the terms of a general partnership are up to the partners themselves. It's smart for partners to work out the details in a written partnership agreement—particularly since all of the partners will share liability for the business. Without a written agreement, the default laws of your state will govern the partnership.

Speak to our attorneys if you want help understanding the framework of a general partnership.

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