Business Law Attorney
A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.
The following steps will give you an outline of the steps required to form a partnership.
- Select an available business name for the partnership.
Pay attention to trademark considerations
- Register the business name that you have selected with
all of the proper authorities such as: Local, state, and federal
- Negotiate and execute a partnership agreement. This is
not normally legally required, but is considered a smart
- Obtain any required local licenses from the city or
county offices. They normally have a web site that will tell you
where you need to go and how much you can expect to pay for any
- Register your new business with the state and make
sure you have an understanding of any tax obligations.
- Apply to the IRS for an Employer Identification Number
- Open a bank account for your business. Always keep
your business and personal account separate. You will need your
business name and your EIN number and a copy of the partnership
agreement or your business name filing that show the partners'
A partnership must file an annual information return to report
the income, deductions, gains, losses, etc., from its operations,
but it does not pay income tax. Instead, it "passes through" any
profits or losses to its partners. Each partner includes his or her
share of the partnership's income or loss on his or her tax return.
Partners are not employees and should not be issued a Form W-2. The
partnership must furnish copies of Schedule K-1 (Form 1065) to the
partners by the date Form 1065 is required to be filed, including
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