General Partnership Law
What is a general partnership?A general partnership is defined as a business unit that it made up of at least two units, often times a general partnership can be more than two units. Each partner in a general partnership play a role in money, labor, special skill or property, and each partner will share the profits and losses from each business. For more information about general partnerships read below where Experts have answered many questions.
What is a general partnership agreement?A general partnership agreement is a contract that outlines any duties, rights, responsibilities and liabilities of all the partners in a general partnership business. When dealing with a general partnership many will begin to notice that these are unique businesses that are known in many states over the United States. These partnerships normally don’t require any filing requirements, with that being said most of the requirements that relate to a general partnership that is found in a section located in the general partnership agreement.
General partnership vs. limited partnershipThe difference between a general partnership and a limited partnership is that a general partnership all the partners are individually liable for the partnership debts outside of the funds are were given to the partnership. As for a limited partnership, this partnership has little knowledge or participation in the many activities of this partnership.
How to form a general partnership?Below are legal steps in order to form a general partnership:
1. The individual(s) will need to decide on a name for the partnership business.
2. Once a name has been decided on, the partner(s) will need to make sure that name is available.
3. The partner(s) will need to outline and signed by all the partners that are involved.
4. Will need to file a statement of General Partnership with the Secretary of State in the state that the business in located.
5. The business will need a Federal Taxpayer Identification Number (EIN) in order to open up a bank account for the business.
6. Will need to register the Partnership Name with the Local Level by getting a Fictitious Name.
7. Open a bank account, get a local city business license, and purchase a seller’s permit.
8. The last step includes if any employees will hired the partnership will need to register the employees with the Employment Development Department of the State.
What are the steps to dissolution of a general partnership?When thinking about dissolving a partnership there are some steps that need to be taken in order to do this legally. Below are the listed steps in dissolution of a general partnership:
• The partner will need to notify the state and federal tax authorities that they have decided to dissolve the partnership;
• The partner will need to file and turn in a dissolution and liquidation form to the state in which the business is located (sometimes this is not required, but also good to take the step in order to be prepared).
• The partner will need to inform all creditors that the partners are no longer responsible for any debts of the others;
• Finally, the partner will need to inform all suppliers, customers and clients that the partnership has decided to dissolve
A general partnership can often be an easy partnership to set up, although there are still some questions that can still arise. Before taking these matters into your own hands without being fully informed contact the thousands of Experts.