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This step-by-step guide will explain how to form a general partnership in Louisiana and the benefits and possible drawbacks.
The general partnership offers many benefits for new small business owners. However, the partnership structure is limited by its simplicity. This section will review the common pros and cons of the general partnership business structure. If you want to compare the partnership to the other business structures, decide which structure is right for you.
The pros of starting your business general partnership include:
One important benefit of a business partnership in Louisiana is that you can set the length of the business venture ahead of time. This makes it great for a short-term venture. You might consider another structure if you want to run the business long-term and leave a legacy by passing the company down to your heirs.
If your business goals are loftier than a single business venture, the partnership might have drawbacks, such as:
While we can explain the general pros and cons of the partnership structure, only a registered professional can review your circumstances and recommend the best structure to meet your specific goals. Before choosing a business structure, you may want to consult with your attorney or legal advisor.
Once you’ve selected a business structure, the next step to forming a partnership in Louisiana is choosing a name. If you choose not to register your general partnership, you should use the partners’ names in your business name. For example, if your name is Steve Smith and your co-owner is Sarah Bethel, your business name could be “Business by Smith and Bethel.” If the partners want to use a different name, you can register your DBA name for your exclusive use.
If you adopt a name for your general partnership that doesn’t contain the partners’ names, it may be a “doing business as,” “DBA,” or “assumed” name. You can register your DBA name with the county clerk so others can identify your business. If you want to use a unique, protected trade name, you can register it with the Secretary of State to prevent other businesses in the state from using that name. If you’re still considering options, you may file to reserve your trade name with the Secretary of State for 120 days.
Your Louisiana General Partnership Agreement sets rules for how your business will operate. You can choose to vary the partners’ participation in profits, commercial benefits, losses, or the distribution of assets. You can also specify the situations that trigger business dissolution or the times a partner may dissociate (leave the partnership). If you don’t create a Partnership Agreement, you’ll have to resolve your disputes based on the default rules found in the Louisiana Civil Code, Title XI—Partnership.
While there’s no formal Louisiana general partnership registration to form a new business, you may need to obtain licenses, permits, and clearances before legally operating. You’ll need to search for your business’s needs at the federal, state, and local level (parish, county).
Standard licenses and permits include a certificate of occupancy, occupational licenses for professionals and other regulated industries, food permits, or beverage or tobacco permits. The Lousiana Secretary of State online portal “geauxBIZ” offers a new business checklist to help you find the licenses you need.
If even this sounds like more work than you’re up for, we offer a comprehensive Business License Report that lists all your licensing and permitting needs at every level of government.
Every general partnership in Louisiana needs an Employer Identification Number from the IRS. You’ll need an EIN to report wage withholding and federal taxes. You can apply online with the IRS, or we can complete the application for you with our Employer ID Number Service.
To obtain a state identification number, visit the Louisiana Secretary of State’s online portal “geauxBIZ.” Not only will you register with the Secretary of State, but you’ll register with the Louisiana Department of Revenue and Louisiana Workforce Commission at the same time. Your state identification number identifies you when you pay sales taxes, excise taxes (on certain goods), and state wage withholding. You’ll also use it if your partnership files a composite return for any nonresident owners.
Once you’ve obtained your EIN and other permits, consider opening a business bank account. Opening a new account exclusively for your partnership allows you to keep the business income separate from your personal finances. Consider what level of insurance your business needs and shop for a provider. Finally, don’t forget to consult your legal and financial advisors to ensure your finances are on track for opening.
While starting a new business can be daunting, we’ve done it thousands of times. Sign up for any of our specially-curated business products and services, and you’ll gain access to our team of business experts. When you use our Worry-Free Compliance Service, we’ll remind you of important deadlines and keep your essential documents on your business dashboard. We’ll be here for you through the life of your business.
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.
To form a general partnership in Louisiana, all you need to do is form a contractual agreement with another person to share in the co-ownership of a for-profit business. No formal registration is required, but be sure to check for any licenses, permits, and tax accounts you may need.
No, a Louisiana general partnership doesn’t pay taxes at the entity level. The partners will report their share of the business income on their individual tax returns. However, the partnership may file a state composite return for nonresident partners.
In a general partnership, the owners are referred to as “partners.” Together, they share equally in the operational decisions, profits and losses, and liability. If you form a limited partnership or “partnership in commendam,” the ownership is made up of two types of partners. “General” partners have unlimited liability for the business debts and make operational decisions. “Limited” partners contribute capital but don’t have liability or responsibility for decisions.
In the general partnership, the partners share equally in making decisions for the business and liability for its debts.
The general partnership is primarily liable for its debts. If a creditor exhausts the partnership’s resources, a partner in a general partnership has unlimited liability for his virile share of partnership debts.
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