In New York, a general partnership is when people team up, combining skills and resources. Explore our guide for crucial insights on navigating general partnerships in the dynamic business landscape of the Empire State.
Forming a partnership in New York can be a low-maintenance and tax-friendly way to operate a business venture. That said, it is not necessarily the best business entity type for everyone.
Read on to learn about how to form a general partnership in New York.
Forming a partnership in New York is an ideal choice for many people. For others, it’s a definite step in the wrong direction. To understand whether it’s the best option for you, consider some of the pros and cons of this type of entity.
Here are the key advantages of partnerships to keep in mind:
As you might see from this list, general partnerships are often ideal choices for short-term business ventures. For more long-term investments, it is generally better to establish a formal business entity, like an LLC or corporation.
Like everything else, a business partnership in New York has several disadvantages that are important to consider:
To help you decide whether general partnerships are right for your business, we recommend that you contact a trusted legal professional and financial advisor.
Now that you’ve made a decision to move forward with your general partnership, it’s essential that you come up with your business’s name. Think very carefully about your business’s name. It will be your business’s first introduction to your customers, and it will be listed on all official business documents.
It is not uncommon for general partnerships to simply use the names of their partnerships as the official business name. Whatever your decision, know that you do not need to register as a general partnership in New York unless your business uses an assumed name as well as a legal name.
Most states require that general partnerships register any names that they operate under aside from their actual legal name. Generally, these names are called “DBA” (short for “doing business as”) names. New York uses different terminology from most states, however, and refers to these names as “assumed names.” Therefore, if you’re using a name for your business that is not its official name or your personal name, you will need to file a Certificate of Assumed Name. You should file these forms with the local county clerk. If your business is located in another county, file the Certificate of Assumed Name with that county’s clerk.
To learn more about filing a Certificate of Assumed Name, contact the applicable county clerk using New York state’s online directory of its county clerks.
Although the exact amount will vary depending on your county, you should expect to pay some kind of filing fee. If you’re interested in obtaining an assumed name for your business, check out our page on New York DBA names.
Although not required, we strongly recommend that you and your business partners clearly define the rules of the partnership. Doing so can prevent all kinds of problems down the road. The best way to create the rules of your New York general partnership is to draft a Partnership Agreement. When you draft a New York General Partnership Agreement, you can form almost any rule that you think will be helpful to business. Partnership Agreements define the rules surrounding issues like:
If you do not have a signed Partnership Agreement, your business must resolve any and all business issues using New York’s default partnership rules. It is quite possible that New York’s default rules are less than ideal for your business. Therefore, it’s best to define your partnership’s rules in the way that makes the most sense for your business.
Generally speaking, there are no New York general partnership registration requirements. Nonetheless, most businesses (regardless of what type of entity) need to obtain some kind of business license or permit. As such, you should carefully research which licenses, permits, and clearances your general partnership needs.
Determining the kind and number of licenses that your business needs depends on its industry, location, and other details. Although New York does not have a general business license, certain counties and cities may have their own general business license requirements.
We understand how taxing it is to have to research which licenses, permits, and clearances your business needs. Rather than wasting your time doing research online, consider purchasing one of our Business License Reports. Together with our partners at Avalara, we’ll compile a list of all of your licensing and permitting needs at every level of government. That way, you can focus on the business tasks that matter the most!
The Internal Revenue Service (IRS) requires that all partnerships have Employer Identification Numbers (EINs). EINs essentially serve as a social security number for your business, allowing it to pay federal taxes properly. Although you can obtain an EIN yourself from the IRS, it is yet another task that can suck up time that you need to spend on other aspects of your business. If you want to save yourself some time, consider using our Employer ID Number Service.
Almost every New York business needs to obtain a certificate to pay sales taxes in the state. Businesses in select industries may need to pay additional taxes. As a result, you’ll need to register as a sales tax vendor in New York state. You will also need to create a business account with the state.
The final step in forming a New York general partnership is setting up a business bank account. With an EIN, obtaining a business bank account is fairly straightforward. Depending on your situation, you may want to obtain business insurance and assess your financial state before moving forward.
With those steps done, be sure to congratulate yourself. You’ve officially formed your own general partnership.
Although New York general partnerships are easier to form than other business entity types, they are certainly not free from paperwork hassles. Keeping your general partnership compliant with the law involves obtaining multiple licenses, permits, and clearances, and paying taxes.
But there is good news. We’re dedicated to helping business owners deal with the administrative side of things. That’s why we have a comprehensive catalog of business formation and compliance services, including our Worry-Free Compliance Service. With these services, we can make running your business much easier. Let us help you get started today.
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.
You do not need to register a general partnership in New York. However, you will need to file a Certificate of Assumed Name for any additional business names. You will also need to register for state and federal taxes and meet all licensing, permitting, and clearance requirements.
General partnerships enjoy pass-through taxation, which means they do not need to pay corporate taxes. However, general partnerships have to pay other New York business taxes, including sales tax.
Partners own a share of the business and have a say in how the business is run. Owners have a share of the business but cannot influence how the business operates.
You can organize your general partnership according to New York state’s default partnership laws, or you can create and sign your own Partnership Agreement with your business partners.
Unless specified otherwise in a Partnership Agreement, each partner is jointly and severally liable for the general partnership’s debts.
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