In North Carolina, a general partnership is when people join forces, combining skills and resources. Check out our guide below for valuable insights on navigating general partnerships and succeeding in the business landscape of the Tar Heel State.
Within a North Carolina general partnership, all owners share the company’s profits, losses, and liabilities equally.
Read on to learn about how to form a general partnership in North Carolina. We’ll also discuss the pros and cons of starting up a North Carolina general partnership.
Depending on your goals, a general partnership can be an excellent structure for your business. Other businesses will want to opt for a more stable form of business structure. Before making any big decisions, it’s best you consider the pros and cons of forming a partnership in North Carolina.
The pros of a general partnership include:
General partnerships are ideal for short-term business ventures. However, you may want to consider structuring a long-term business venture as a corporation or LLC because partnerships often dissolve when one partner exits the business or passes away.
No business comes without its drawbacks, and general partnerships are no exception to this rule. The major downsides of running a business partnership in North Carolina include:
It’s critical not to take these business decisions lightly. For that reason, you should consult a trusted legal and financial advisor before you decide to form a general partnership.
Once you’ve decided to form your general partnership, the next step is to choose the name of your business. You aren’t required to register as a general partnership in North Carolina, but only as long as you use the surnames of the individual partners in the name of the business. For that reason, most partnerships will just use the partners’ surnames.
You can also use a fictitious, assumed, or DBA (“doing business as”) name for your partnership. If that’s the case, you will need to make sure your business’s assumed name is available. You will also need to file a special form with the state.
The form you need to file to use an assumed name in North Carolina is called the Certificate of Assumed Name. But you don’t file the form with the North Carolina state government. Instead, file the Certificate of Assumed Name form with the Office of the Register of Deeds in the county that your business is located in. You can find a handy directory of all North Carolina Register of Deeds offices online. When you fill out the form, make sure you list all the counties that your partnership will conduct business in.
After you file the form, you need to pay a small filing fee. If you’re not ready to start your business but want to lock in your name, you can apply to reserve that name for future use.
Your Partnership Agreement is the foundation of your general partnership. It lists all of the binding rules and procedures of your business. Partnership Agreements often touch on:
While North Carolina does not require a General Partnership Agreement for each general partnership, it’s essential that you have one. Having a Partnership Agreement allows you to create the rules that you think are best for your North Carolina general partnership. If you don’t have a Partnership Agreement, then you have to follow North Carolina’s default partnership laws as delineated in the state’s Uniform Partnership Act. Few people prefer default rules over ones that they can craft themselves!
Virtually every business in North Carolina needs to obtain licenses, permits, and clearances. That said, North Carolina doesn’t have a general partnership registration requirement, nor does it require that businesses obtain a general business license.
Instead, a business’s license requirements vary according to several factors, including:
Whether your partnership handles certain materials will also determine what permits and licenses it needs to acquire. Federal, state, and local governments all have their own say when it comes to licensure and permitting requirements.
Understanding which licenses and permit requirements apply to your business is no small matter. In fact, researching the various possible license and permit requirements can take incredible amounts of time and work. If we look at just the state level, North Carolina offers over 700 regulatory, state-issued licenses and permits.
The good news is that we can help you with this process. In collaboration with our partners at Avalara, we can do the research for you by compiling a Business License Report. Our Business License Report analyzes your business and identifies your licensing and permitting requirements, whether they come from local, state, or federal governments.
Employer Identification Numbers (EIN) are used by the IRS to ensure that businesses pay their federal taxes. They are a requirement for most businesses, including partnerships. However, the IRS does not automatically give EINs to new businesses. Instead, you need to apply for one. We can handle this for you with our handy Employer ID Number Service.
Most North Carolina businesses have to pay sales and use taxes, including businesses that sell any services or tangible personal property. To pay sales and use taxes, you first need to register with the North Carolina Department of Revenue online. Once you successfully register, the Department of Revenue will send your business a state sales and use tax account ID.
Once your general partnership has the appropriate state and federal tax accounts and numbers, it’s a good idea to quickly set up a business bank account. Your partnership will also likely need one or more types of insurance to protect your investment.
If you’re considering forming a business, let us help you turn your dreams into reality. With our specially-crafted suite of business development and maintenance services, we can meet many of your business needs. In addition to providing formation services to new business owners, our Worry-Free Compliance Service can help current business owners meet all of their legal and administrative obligations.
If you think you might want to start another kind of business in North Carolina, we can get you started with our North Carolina LLC and North Carolina Corporation Formation Services. Let’s get going 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.
General partnerships don’t need to register in North Carolina unless they use a business name that doesn’t contain the partners’ surnames.
No. General partnerships aren’t taxed at the corporate level. Instead, the partners pay personal income taxes on their gains from the business.
Partners both own part of the business and have a say in its operation. Owners are usually individuals who have received an ownership interest from a partner. Unlike partners, owners don’t have a right to run the business.
You can organize a general partnership just by starting a business with at least one other person. General partnerships can operate according to their own Partnership Agreements or North Carolina general partnership law.
Unless stated otherwise in a Partnership Agreement, each partner is responsible for the partnership’s debts.
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