Learn the basics of starting a general partnership in New Jersey, exploring key components and legal insights in a guide designed to empower entrepreneurs for successful collaborations in the state’s dynamic business landscape.
Starting a business by yourself is scary. But when you take on the challenge with a good partner by your side, it becomes much more manageable. A general partnership in New Jersey allows two or more people to own a business together. Not sure how to form a general partnership in New Jersey? Don’t worry. We’ll go over the steps involved in forming a partnership in New Jersey and who should consider doing so.
Some business owners like partnerships because they are simple. Others prefer other types of businesses, like limited liability companies or corporations. Let’s take a closer look to see if a New Jersey general partnership is right for you.
Some of the benefits of forming a New Jersey general partnership include:
There are some possible disadvantages to a New Jersey general partnership. These include:
A general partnership is a good way to start, but if you want to run a business for a long time, a corporation or LLC might be a better fit.
A general partnership usually has just the last names of the partners. If you want to create a separate name for your partnership, you may want to consider registering an assumed or “doing business as” (DBA) name.
You can register an assumed name for your New Jersey general partnership through the New Jersey Secretary of State. You will want to avoid choosing a name that is too similar to an existing business or one that might imply illegal activity. If you need help registering your DBA in New Jersey, we can provide you with more information.
A partnership agreement is like a rule book for your partnership. It tells people what they should do and how to act insofar as the partnership is concerned. It helps you avoid problems later on, even if you don’t think there will be any problems now. If you do not have a partnership agreement, then disputes will be subject to the New Jersey Uniform Partnership Act, which may not be the best avenue to take.
General partnerships in New Jersey do not need a statewide business license unless they are engaged in certain professional trades. Some of the business licenses in New Jersey include:
It might be worth checking with your county and state government to see whether your business needs any type of license. The state has a site where you can explore all the professions that require licenses, but we can help take that off your plate with our Business License Report.
An EIN is a number that the federal government gives to businesses. If you plan on opening a bank account, hiring employees, or borrowing money as part of your business, then you will need an EIN from the government. For many businesses, this is necessary. Fortunately, we can help you obtain your EIN.
Your New Jersey general partnership will need to register with the State of New Jersey. The partnership may be subject to income tax on its New Jersey-derived income. You may also need to pay an additional filing fee if you have more than two partners in your New Jersey general partnership. You can register as a general partnership in New Jersey on the state’s registration portal.
After starting your New Jersey general partnership, you may want to think about other things. For example, it is a good idea to set up a bank account for your business. Or maybe buy or lease office space. You can also take out an insurance policy if your business is exposed to risk or liability. You may want to explore financing options if you need leverage for projects. This could mean borrowing money from a bank or other institution to help pay for the costs of your project.
A general partnership can be a good idea for short-term business endeavors. But there are two other types of entities that may work better for you: an LLC and a corporation. You can talk with us about forming either of these entities and we will help you decide which one would best fit your needs. We also offer a wide range of additional services, including our Worry-Free Compliance Service. Feel free to contact us if you are interested in creating a New Jersey entity or registering an assumed name in New Jersey.
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.
General partnerships will need to register if they plan on using an assumed name.
General partnerships in New Jersey may be subject to income tax on their New Jersey income.
A partner is someone who runs a business and owns part of the business. An owner has an ownership interest in a company but doesn’t have the right to run the company automatically.
A general partnership is created when two or more people own a business together. A general partnership is not created through the state, unlike an LLC or corporation.
Partners are liable for the debts and liabilities of the partnership.
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