Discover the intricacies of forming a general partnership in the dynamic business environment of Arizona, where joint ventures thrive, as we guide you through essential steps and key considerations in the comprehensive resource below.
Forming an Arizona general partnership is one of the fastest ways to start conducting business with other people. There are no formalities requiring registration with the state. You can basically just start doing business together. That being said, there are several things you should know about forming a partnership in Arizona.
Forming a general partnership in Arizona has its pros and cons. There are a number of other business entities to consider such as an Arizona limited liability company (LLCs) or Alaska corporation. These are more formal business entities, but we are happy to help you through the process with our formation services. Here are some things to consider when determining if you should form an Arizona general partnership.
One really great thing about forming an Arizona general partnership is that you can just jump right in without any of the administrative formalities. You also avoid ongoing maintenance fees such as annual reports or amendments to formal documents. Partnerships are especially convenient for short-term business ventures. They are also subject to pass-through taxation, meaning that taxes pass through to the personal tax returns of the individual partners.
Simple is great, but it isn’t always best. An Arizona general partnership does not provide any personal liability protection. All financial concerns such as debts or legal obligations are the personal responsibility of you and your partners. It is worth noting that the lack of formal structure may cause partnerships to have a difficult time raising capital when compared to other business entity types.
If you do nothing, your partnership will automatically operate under the name of you and your partners. In order to operate under a different name, you will need to file a certificate with the Secretary of State stating the names, addresses, and signatures of all partners.
Changing your business name by acquiring a DBA (doing business as) name from the state of Arizona. A DBA allows you to use a different name in an official capacity. This gives you the opportunity to choose a name that is recognizable to your customers and conveys what you do.
Your first step in the process of obtaining a DBA in Arizona is to see whether your desired name is available. Conducting a business entity search through the Arizona Department of State. Submit your DBA by using a Trade Name Registration Application with the Secretary of State.
An Arizona general partnership agreement is a type of contract that outlines important aspects of the business. This agreement may include partner roles, rights, and responsibilities, along with how to share investments, profits, and losses. Put all provisions in writing and file with other important company documents. There can be more than two partners in a partnership agreement.
You may file a Statement of Partnership Authority with the Arizona Secretary of State. This is an optional declaration that clearly states who the decision-makers are in the partnership and who has authority to do things like sign documents and open accounts. If no partnership agreement is created, Chapter 5 of the Arizona Uniform Partnership Act will govern all rulings related to the partnership.
Arizona doesn’t issue state-wide business licenses. General business licenses may be required at the local level, so make sure to check with the municipality where you conduct business. Depending on your industry and type of business you may also be required to hold federal, state, or local permits, licenses, or permits to legally conduct business.
Trying to figure out exactly what you need can be a daunting task. Don’t sweat it. We can do that for you with our Arizona Business License Report service.
Employer Identification Number (EIN) is issued by the IRS. It is necessary for your general partnership to pay taxes, hire employees, and open business accounts. Rather than worrying about trying to find the time to apply for your EIN, can take care of that for you with our Employer ID Number Service.
All Arizona businesses, with the exception of sole proprietorships, will need to pay Arizona transaction privilege tax (TPT). Depending on your type of business, it may be best to use the Arizona Joint Tax Application (JT-1). This one form is used to apply for transaction privilege tax, use tax, Employer Withholding, and Unemployment Insurance.
Once you have the appropriate name, agreement, licenses, permits, and tax numbers, you are ready to start running your Arizona general partnership. Open a banking account under the business name to keep personal assets and business finances separate. Depending on your industry, you may also need business insurance, so keep that in mind.
An Arizona general partnership is one of the simplest businesses entities to start. It doesn’t take much time, but it does have pros and cons. Despite how easy it is to get started, just like any other business, it is important that you stay on top of any state and local requirements to keep your business operating smoothly. Our extensive suite of business development and maintenance services can help you easily fulfill many of your business obligations.
As your business continues to grow, we are here to make sure you have all the tools to expand and stay organized.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
There are no formalities requiring you to register as a general partnership in Arizona. Partners can basically just start doing business together. You will need to register for a DBA (if needed), obtain a federal and state tax ID, and meet other local requirements.
General partnerships don’t have to pay income taxes at the entity level. Taxes pass-through to the personal tax returns of individual partners. Arizona general partnerships do have to pay state transaction privilege tax (sales tax).
Generally, a partner has the ability to run the business and owns an interest in the business. They can transfer this interest, but that does not automatically entitle the new owner to the same operational rights.
You can form an Arizona general partnership just by starting to do business with another person. If there is no partnership agreement, Arizona state rules will apply. Partnership agreements are recommended.
Arizona Business Resources
Form a General Partnership in These States
Ready to Start Your Arizona LLC?