Partnerships
Here are the steps you should take to form a partnership in New York. Whenever two or more individuals agree to collaborate to make a profit, regardless of whether they formalise this through documented or verbal means, they create a general partnership. While there are no formal filing or registration requirements needed to create a partnership, partnerships must comply with registration, filing, and tax requirements applicable to any business. There are also some steps every partnership should take to make sure they follow sound business practises when they start their new venture.
To form a partnership in New York, you should take the following steps:
- Choose a business name.
- File a fictitious business name.
- Draft and sign a partnership agreement.
- Obtain licences, permits, and zoning clearance.
Obtain an Employer Identification NumberTo find out how to establish a partnership in any other state, see Nolo’s 50-State Guide to Forming a Partnership. To read more about partnerships in general (including the difference between a partnership and a limited partnership), see Nolo’s partnership section.
Choose a Partnership Name
In New York, a partnership may use the surnames of the individual partners or may use a fictitious business name. If you plan to use a fictitious business name, it must be distinguishable from the name of any other company currently on record.
File a Fictitious Business Name
Suppose you use a business name that is different from the surnames of the individual partners. If your business happens to operate in New York, then you must present a certificate of fictitious business name to your respective county’s clerk’s office.
Draft and Sign a Partnership Agreement
A partnership agreement is not a mandatory legal requirement for establishing a partnership. However, it is a significant step to ensure a clear understanding between you and your partners. A well-drafted partnership agreement will help you decide in advance how to handle certain situations.
Even well-intentioned, honest partners can find themselves in a legal battle if they still need a written partnership agreement memorialising their initial purposes.
Obtain licences, Permits, and Zoning Clearance
Your business may need to obtain business or professional licences, depending on the business activity you are engaged in. New York provides a comprehensive website for every occupation that requires a licence from a partnership.
Obtain an employer identification number.
The IRS requires partnerships to obtain an Employer Identification Number, or EIN. The government allocates this numerical code, which comprises nine digits, for tax-related matters. Partnerships must have an EIN regardless of whether or not they have employees. Registering for an EIN can be done online at the IRS website.
Next Steps
It is essential to consider doing the following once you have created your partnership:
- Open a business bank account.
- Obtain general liability insurance.
- Report and pay taxes.
General Question
What are the requirements for the formation of a partnership?
To determine whether a partnership exists, courts look at:
- The intention of the parties
- Sharing of profits and losses
- Joint administration and control of the business operation
- Capital investment by each partner
- Common ownership of property
How much does the process cost?
For pricing and further assistance, please email us at [email protected] or via WhatsApp through the website, or you can view our Contact Us page for further information on how to contact us. An immigration assistant from our office will get back to you as soon as possible.
In the United States, what are the varieties of partnerships that organisations can establish?
There are three relatively common partnership types: general partnership (GP), limited partnership (LP), and limited liability partnership (LLP). A fourth, the limited liability partnership (LLLP), is only recognised in some states.
How many owners are required to form a partnerships?
A business with two or more owners can be a partnership. Like a sole proprietorship, forming a general partnership does not require filing documents or taking specific action. If you and another person run a business together, it is a general partnership by default.
Is it necessary for partnerships to operate under specific guidelines?
The only requirement is that, without a written agreement, partners don’t draw a salary and share profits and losses equally. Partners have a duty of loyalty to the other partners and must not enrich themselves at the expense of the partnership. Partners also have to provide financial accounting to the other partners. For example, if you’re in a partnership, you cannot make a deal to buy from a supplier at an inflated price with the understanding that you will receive a kickback from the supplier. It violates your duty to the partnership, and your partners can demand an accounting from you regarding the deal. The company has the right to sue you for damages and to keep any money you made from the deal if you do not fulfil your obligations.
Alternatively, should you agree to pay an excessively high amount to a supplier by signing a contract, the partnership will have no choice but to honour the unfavourable deal.
When entering a partnership, it’s essential to consider the potential disadvantages that may arise due to legal binds. As a precaution, it’s crucial to choose dependable and astute partners. Additionally, the sole contract for the relationship would exist in a documented partnership agreement.
Such an agreement could outline procedures for making major business decisions. A crucial factor to take into account is how each partner will share the profits and losses as well as their level of control.
How do partnerships pay taxes?
Individual partners remit their taxes through personal income tax returns. As a partner, you have income through your share of the profits (or a loss if the partnership is losing money), and you report this income on your taxes. The partnership reports profits and losses to the IRS on a particular form (so that the IRS knows how much you receive), and you pay the taxes on your portion.
How do partnerships terminate?
Without a written agreement, partnerships end when one partner gives notice of his express will to leave the partnership. If you don’t want your partnership to end so quickly, you can have a written agreement that outlines the process through which the partnership will dissolve. For example, the partnership can dissolve if a particular event happens, or it can provide a mechanism whereby the partnership can continue if the remaining partners agree to do so.
Why Syed Professional Services?
We are committed to providing high-quality partnership formation services that meet your unique business needs. Our team of experienced professionals is dedicated to delivering personalised solutions and support, so you can focus on growing your business. With us, you can expect:
Comprehensive Partnerships Formation Services
Forming a partnership can be complex and time-consuming, but we are here to help. Our comprehensive partnership formation services include legal and regulatory compliance, contract drafting, and negotiation support. As specialists in partnership formation regulations, we guarantee the successful structuring of your partnership, considering all the intricacies involved. Our contract drafting services provide a well-drafted, legally binding partnership agreement that protects your interests.
Tailored Solutions for Your Business
We recognise that every business is unique. We know a “one-size-fits-all” approach to partnership formation doesn’t work. That’s why we offer customised solutions tailored to your needs and goals. Our team of experienced professionals takes the time to understand your business, including its strengths, weaknesses, and long-term goals.
Professional and Reliable Support
When it comes to partnership formation, it’s essential to have professional and reliable support. That’s why at Syed Professional, our team comprises experts in partnership formation and business law. We pride ourselves on providing the highest level of professional support and guidance to help you navigate the complexities of partnership formation regulations. Our foremost aim is to provide you with the most up-to-date and proficient advice by keeping ourselves abreast of the latest industry developments and regulations. You can trust us, knowing that we will leave no stone unturned to leave you feeling informed and knowledgeable.
Putting our team to work means success is inevitable when creating a solid partnership structure with you in mind. Explore our Partnership Formation Services today.
We provide various partnership formation services to help businesses of all sizes and industries form lasting partnerships. Our services include:
Legal and regulatory compliance
We help you navigate the complex legal and regulatory requirements of forming a partnership, ensuring that your partnership complies with all relevant laws and regulations.
Contract drafting
Our team of legal experts can draft comprehensive partnership agreements that cover all aspects of your partnership, including governance, profit-sharing, and dispute resolution.
Negotiation support
We provide support and guidance throughout the negotiation process, helping you reach agreements that are fair and beneficial for all parties involved.
Partnerships and Dissolution Services
If you need to dissolve a partnership, we can provide legal support and guidance to ensure the process is handled smoothly and complies with all relevant laws and regulations.
Partnerships with Us Today
If you want to form a lasting partnership with another business, look no further than Syed Professionals. Our comprehensive partnership formation services, tailored solutions, and professional support make us the ideal partner for businesses of all sizes and industries. Contact us today to learn more about how we can help you achieve your partnership goals.