STEPS TAKEN BY
PARTNERSHIP IN
SETTING UP ITS
BUSINESS UNIT
Answers
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How to start a Partnership Business :
1. Choose your partners wisely: You want to be able to articulate with specificity why this particular person or people are necessary components of building a successful business. The prospective partner should have financial resources, connections, or vital skills you lack.[1] This might be the most important step of all, because the answer will determine what type of partnership you create and the terms of your partnership agreement.
2. Make sure all the partners know what the other partners are expecting: You will want to discuss the roles and responsibilities of each partner prior to writing up the partnership agreement, and certainly prior to going into business. You need to know what your partners expect from you, and they need to know what you expect from them. Make sure that the reasons they want to form the partnership are compatible with the reasons you want to form the partnership.
3. Choose a name: When you choose a name, you'll need to make sure that there isn't another business of the same type that has that name. Otherwise, you could run afoul of trademark law down the road.
4. Write up a partnership agreement: If you partner up as an LP or LLP, you'll be legally required to do this. Even if you're partnering up as a general partnership (GP), it's best to have the terms and conditions of your venture in writing. There is a fantastic article covering the details of writing up an agreement here: Write a Partnership Agreement, but the basics of what to cover are straightforward.
5. Register your partnership: If you are using the LP or LLP structures, you will be required to register your partnership with your state government. Although GPs are usually not required to register with state government (beyond registering the name), a few types of businesses (think alcohol, tobacco, and firearms) are required to register with the federal government.
6. Get a federal Tax ID number: Although the income from a partnership is taxed as personal income, you will still need to file a statement with the IRS called an Annual Return of Income. For that, you will need a Tax ID number or Employer ID number. These are fairly simple to get. You can apply online with the IRS at.
7. Obtain the necessary licenses: Most businesses are going to need state and local business licenses. The licenses needed are highly specific to each state, locality, and type of business. To find out what permits and licenses you need locally, call your city and county governments. You can find information for state licensing requirements at.
8. Take care of business: Once you have decided on partners, written a partnership agreement, and completed the necessary registration and licensing, you're almost ready to get to work. Every business will have a few remaining requirements that are specific to that business, but almost everyone is going to need business cards and a website. Get your cards printed and your website up and running, and go out and conquer the world of business.