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General Partnership

General Partnership. By: Jacqueline DiFelice, Maddi Kepano, Ashlin Hyslip. Definition.

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General Partnership

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  1. General Partnership By: Jacqueline DiFelice, Maddi Kepano, Ashlin Hyslip

  2. Definition • In the commercial and legal parlance of most countries, a general partnership refers to an association of persons or unincorporated company. Each general partner has equal responsibility and authority to run the business. Any partner may represent the business without the knowledge of the other partners- the actions of one partner cab bind the entire partnership.

  3. 5 advantages • Easy formation: partnerships are relatively easy to establish. • Simple structure: It is much easy to create a business if you have someone else working with you. • Pass through profit and taxation: profits and tax obligations pass through the company to the partners where income is divided according to their agreement. • Dissolution: a partnership can be dissolved at any time and partners have full liability for their business. • Partnership provide moral support and will allow for more creative brainstorming.

  4. 5 disadvantages • Partnerships are limited to a small number of owners. • Business grows too large for personal liability. • Profits must be shared with other so you must decide value. • You have to consult your partner and negotiate more as you cannot make decisions by yourself. • Disagreements between partners can destroy a business.

  5. Instructions • Step 1: choose a business name for the Partnership • Step 2: Draft and sign a well written partnership agreement • Step 3: file a statement of General Partnership with the Secretary of State (of your state) • Step 4: Get a Federal Taxpayer Identification number (EIN) to open a bank account. • Step 5: Register the partnership name at a local level by getting a Fictitious business name. • Step 6: open a bank account: it’s a separate bank account for your partnership. • Step 7: obtain a local city business license

  6. Instructions….. • Step 8: obtain a sellers permit • Step 9: If you will be hiring employees, register with the state Employment Development Department

  7. Taxation • There are entity level taxation: When the partnership itself is taxed, all of its profits may be taxed by the state in which its principal office is located or the state may tax the partnership only on profits derived from doing business within the taxing state. • It doesn’t tax the partnerships, but does taxes partners. The partners are taxed on all of the partnership’s taxable income. • Partnerships must file IRS form to report partnership business activity during the tax year. • Most state tax partners exactly the same way the IRS does, the tax rates are generally lower and are imposed on only income from in-state partnership business activity

  8. Examples • Examples of general partnerships • Medical: occur when physicians share office space • Legal: a law office many have many partners within a business structure. • Real Estate: a real estate office may be owned by some of the people working there, each of whom may administer their own sales and generate profits for the umbrella business. • Advertising, Marketing, and Graphic Design: the various duties in the partnership might be delineated with one partners selling and developing accounts while the others create advertising and marketing strategies.

  9. CITATIONS • Http://smallbusiness.chron.com/general-patnership-taxexempt-10592.htmlhttp://www.how-to-start-a-business-guide.com/partnership-advantages.html • Http://smallbusiness.chron.com/typical-examples-general-partnership-62195.html • Http://smallbusiness.chron.com/advantages-general-partnerships-4437.html • http://www.yourlegalcorner.com/articles.asp?id=16&cat=part

  10. THE END

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