Form a General Partnership in Illinois

Explore the details of general partnerships in Illinois, discover business synergy, and navigate through our guide to optimize your collaborative ventures in the Prairie State.

Excellent 4.8 out of 5 stars 15,678 reviews

In an Illinois general partnership, business partners share equally in the profits and losses from their business. There are lots of great reasons for forming a general partnership in Illinois, but you’ll want to confirm this business model fits your needs before doing so. In this article, let’s go over how to form a general partnership in Illinois.

We’ll also touch on the pros and cons of the Illinois general partnership structure. 

Step 1: Determine if you should start a general partnership

Running a general partnership can be a great vehicle for many types of businesses. However, this business structure might not be ideal for you or the type of enterprise you intend to run. We’ve put together some pros and cons of forming a partnership in Illinois.

While it can’t answer the question of what business structure is right for you, it may help you decide if you should run your business as an Illinois general partnership. 


A general partnership can be a great business option because:

  • It’s very easy to form
  • It requires little maintenance
  • Corporate compliance is relatively inexpensive
  • The distribution of losses and profits is typically straightforward
  • The business structure can enjoy pass-through taxation 

A general partnership can be a great structure for short-term business ventures. However, general partnerships don’t have the permanence or durability of legal entities like LLCs or corporations. If your goal is to create an intergenerational business or to pass your partnership interest down, a general partnership may not be for you. Illinois general partnerships are often designed to dissolve when one partner leaves the business or passes away.


Depending on your aspirations and the type of business you want, running a business partnership in Illinois could make achieving your goals more challenging. Some of the pitfalls of running an Illinois general partnership include: 

  • Lack of personal asset protection, unlike an LLC
  • Partners held jointly and severally liable for the partnership’s liabilities
  • Potentially stricter rules for transferring business ownership to a new partner
  • Few, if any, options for raising capital compared to corporations

Speaking with a lawyer or accountant can give you additional insight on whether forming a partnership in Illinois is right for your business. Whether you’re convinced that a general partnership is the right way to go, or whether you have hesitations, a trusted advisor may be able to provide additional information specific to your needs. 

Step 2: Choose a business name

You normally don’t need to register as a general partnership in Illinois. However, you may need to reserve or register your business’s fictitious, trade, or “doing business as” (DBA) name with the Secretary of State. Typically, this only applies if your partnership name consists of something other than your name and/or your partner’s name. Many unregistered general partnerships use the names of their partners for their business name, which is the default under state law. You can check if your desired name is available as well.

Step 3: File a DBA Name (if needed)

If you choose to use a name for your business other than your own, you’ll need to file a “DBA”  or “assumed name” form. This form is filed with the Illinois Secretary of State or the clerk of the county in which your partnership does business, depending on your business structure. General partnerships typically file their assumed name forms with the clerk of the county in which they do business.

If you’re not ready to use your trade name, you can reserve it with the Secretary of State for a small fee. We can also assist with this process. Our fast, easy DBA Service helps Illinois businesses get their names quickly and easily.

Step 4: Draft and sign Partnership Agreement

In Illinois, you can make many of your own rules for running your Illinois general partnership by drafting your own Partnership Agreement. A Partnership Agreement is a document that governs how your business is run.  The types of rules your Illinois general partnership agreement might cover include:

  • Admission of new partners
  • Dissolution of the partnership
  • Resolution of conflicts
  • Rights of individual partners

In the absence of a Partnership Agreement, your business would have to rely on Illinois statutes and the law as written in the Illinois Uniform Partnership Act of 1997. These codes and rules may not be a good fit for your business, so creating a comprehensive governing document for your Illinois general partnership helps protect you.   

Step 5: Obtain licenses, permits, clearances

In Illinois, might have to obtain certain licenses, permits, and clearances before you can legally run your business. This will depend upon the nature of the services your business provides, and to a certain extent, upon the location of your general partnership. Working with our partners at Avalara, we can help your business by compiling a Business License Report. This report quickly identifies all your licensing and permitting needs at the local, state, and federal levels of government.

Step 6: Get an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is like a social security number for your business. This is something your Illinois general partnership obtains from the Internal Revenue Service (IRS) so it can properly pay its federal taxes. We can help get that task off your plate and liaise with the IRS for you with our Employer ID Number Service

Step 7: Get Illinois state tax identification numbers

You may also need to register for a state tax ID, also called an EIN. This is sometimes known as an Illinois Department of Revenue (IDOR) number. Not every Illinois general partnership needs an IDOR number. It may depend upon the type of business your general partnership does. Confirm with your accountant or another tax professional whether obtaining an IDOR number is required for your business. 

Forming a Business Partnership in Illinois: Next Steps

After you’ve formed your business, received permits and licenses, and set up your tax ID numbers, setting up a business bank account is your next logical step. You may also want to look into different types of business insurance, as well as potential office space to separate your home and workspaces. You will also want to keep up with your taxes.

How We Can Help

Typically, an Illinois general partnership is easy to start. However, the small steps of legal compliance may trip you up along the way. This is part of what makes starting a new business so complex and time-consuming. Not to worry! Our suite of business development and maintenance services, including our Worry-Free Compliance Service, can help you throughout the entire life cycle of your business.

And if you’re ready to form a new business, we can also help with our Illinois LLC and Illinois Corporate Formation Services. Our fast, easy formation services take the paperwork burden off your plate and let you focus on making your business a success.

Illinois General Partnership FAQs

  • You don’t have to register a general partnership with the Secretary of State in Illinois to start one. However, you’ll still register for a tax ID and appropriate business permits to legally operate your company.

  • General partnerships don’t have to pay income taxes at the entity level because they enjoy the advantages of pass-through taxation.

  • In general, a partner has a right to run operations and owns an interest in the business. An owner owns an interest in the business but doesn’t necessarily have the right to run the business.

  • You can form a general partnership by simply going into a for-profit business with one or more individuals. You can develop your own rules for running your enterprise in a Partnership Agreement, or you can follow the default Illinois partnership rules.

  • In general, each partner is jointly and severally liable for partnership debts.

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.

zenbusiness logo

Written by Team ZenBusiness

Form a General Partnership in These States

Start your Illinois Business!