Create a General Partnership in North Dakota

Learn the steps to create a General Partnership in North Dakota or get started with us below.

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North Dakota General Partnership

If you’re looking for a simple way to share ownership of a business with at least one other person, then a North Dakota general partnership might be right for you. General partnerships allow all partners to share in the profits and responsibilities of the business. On top of that, it’s one of the easiest businesses to form and requires very little administrative maintenance. 

Most general partnerships in North Dakota do not need to formally register with the state. However, there are still a few steps you need to follow to set yourself up for success. Below, we’ve assembled a step-by-step guide on how to form a general partnership in North Dakota. 

Step 1: Determine if you should start a general partnership

For some businesses, general partnerships are the ideal setup. Other businesses will want to steer clear from general partnerships. Determining what’s best for your business depends on your specific situation. The first step to making a good decision is understanding the pros and cons of forming a partnership in North Dakota. If you still have questions, we recommend you reach out to a trusted legal or financial professional for further guidance. 

Pros

Let’s start by looking at the main advantages of a general partnership in North Dakota: 

Although most corporations need to pay corporate taxes, general partnerships do not. Instead, the partnership’s owners include their share of the profits on their personal tax returns. 

Cons

Now let’s take a moment to assess the drawbacks of a business partnership in North Dakota:

Partners in a general partnership have joint and several liability. This means that every partner is liable for the partnership’s debts, losses, and legal liabilities. In other words, if someone successfully sues the partnership, you and your partners might have to pay their damages out of your personal funds. 

Step 2: Choose a Business Name

Now that we’ve covered the pros and cons of a general partnership, let’s talk about your partnership’s name. Obviously, your business’s name will be critical for your customers and clients. If you want to take the easiest path, simply use your last names in the company’s name. While it won’t tell your customers anything about your business’s activities, it will save you some paperwork. 

On the other hand, you may want to use a “DBA” (“doing business as”) name for your general partnership. North Dakota calls these “fictitious names,” and it requires all general partnerships to register fictitious names. 

In any event, make sure you check to see that your business’s name is available before taking any concrete action. 

Step 3: File a Partnership Fictitious Name Certificate (if needed) 

If you want to use a fictitious name for your North Dakota general partnership, you will need to file a Partnership Fictitious Name Certificate. File this form with the North Dakota Secretary of State, and make sure you include the applicable filing fee.

 Learn more about the process on our North Dakota DBA page. 

Step 4: Draft and sign partnership agreement

A North Dakota General Partnership Agreement isn’t a requirement to form a partnership, but you should certainly complete one. When people enter into business together, it’s easy to imagine that things will always be perfect and that you won’t have disputes or disagreements. But in reality, you should expect to have disputes between partners and encounter unexpected issues. 

With a partnership agreement, you can clearly outline the rights and responsibilities of each partner. On top of that, you can customize the processes underlying your business’s day-to-day operations. Common topics that you can touch upon include:

Keep in mind that you don’t need to formally file a Partnership Agreement. Just make sure it’s signed and stored in a safe place. 

If you don’t create a Partnership Agreement, then the default provisions of North Dakota’s Partnership Act will apply to your business. This is far from ideal for most business owners. 

Step 5: Obtain licenses, permits, and clearances 

Although there are no North Dakota general partnership registration requirements, you still need to meet all licensing and permitting requirements. Unfortunately, North Dakota doesn’t offer a simple one-size-fits-all business license. Rather, the licensing and permitting requirements depends on factors like location and industry type. Your North Dakota general partnership must adhere not only to state licensing requirements but also federal and local permitting and licensing requirements. Without checking the box on these requirements, you run the risk of incurring penalties, fines, and even the dissolution of your business. 

We understand that you don’t have the time to track down the various licenses that may apply to your partnership. Let us take that off of your to-do list with our Business License Report, which lists your business’s required licenses and permits.

Step 6: Get an Employer Identification Number (EIN)

An EIN is a nine-digit number that the Internal Revenue Service issues to businesses. You’ll need to apply for an EIN before you file federal taxes or open business accounts. However, the IRS doesn’t simply give you an EIN when you start your business. Rather, you have to apply for an EIN yourself. Instead of spending your precious time doing that, let us give you a hand. With our EIN Service, we’ll handle the EIN application process so you can focus on getting your business going. 

Step 7: Get North Dakota State Tax Identification Numbers 

As we mentioned before, a general partnership in North Dakota doesn’t need to pay corporate taxes. However, you still need to file a North Dakota Partnership Income Tax Return on or before April 15 of each year. Partnerships also need to pay sales tax if they sell tangible property or services. To pay sales tax, you must apply for a North Dakota sales tax permit. After you apply for a sales tax permit, the state will issue you a number that’s tied to that permit. 

Forming a Business Partnership in North Dakota: Final  Steps

Now that you have your partnership’s name, agreement, licenses, and tax numbers squared away, you’re just about ready to launch. Just make sure you open a business banking account to keep your personal assets separate from your business’s assets. You may also want to consider business insurance. 

How We Can Help

Starting a North Dakota general partnership is fairly straightforward compared to other types of businesses. Yet we all know that the only constant in life is change. Over time, you’ll need to meet various compliance requirements to keep your business going. You may also need to rethink your business structure based on future events. Whatever happens, we’re standing by to help. With our arsenal of business development and maintenance services, including our Worry-Free Compliance Service, we can help you easily meet your business’s current and future needs. 

We can also give you a hand with forming other kinds of businesses. If you want to establish something more formal, we can help you out with our North Dakota LLC and North Dakota corporation formation services.

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.

FAQs

  1. Do general partnerships have to register in North Dakota?

    You don’t need to register a general partnership in North Dakota. However, you will need to file paperwork if you plan to use a fictitious name.

     

  2. Does North Dakota tax general partnerships?

    No. General partnerships do not have to pay corporate taxes. Instead, individual partners pay personal income tax on the business revenue that they list on their personal tax returns.

  3. What is the difference between a partner and an owner?

    Partners both run the business and possess an ownership interest. Owners have only an ownership interest. They usually cannot influence how the business is run.

  4. How is a general partnership organized?

    North Dakota’s state partnership laws will apply to your business by default. However, you can organize your business how you want if you and your partners complete a North Dakota General Partnership Agreement.

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