Discover the essentials of forming and managing a successful general partnership in South Carolina by exploring our comprehensive guide below, essential for entrepreneurs navigating the dynamic business landscape in the Palmetto State.
By definition, you start a general partnership whenever you and at least one other person act as co-owners of a for-profit business. By default, general partners share equally in the profits and losses of their business and have equal control over the management of the business.
We’ll explore more about how to form a general partnership in South Carolina.
A general partnership is just one of many entity types you could choose for your business. So how do you choose? Making a list of pros and cons for this business structure can be useful, and we can get you started.
Common benefits that can draw business owners to start general partnerships are:
This business structure is a relatively simple one, but it’s not necessarily a long-term one. Many partnerships end because of a partner’s death or departure from the business. General partnerships are normally better for short-term projects rather than long-term projects. To fulfill long-term business goals, you might be better off choosing a more formal business structure.
Some business owners might find many features of a general partnership undesirable, including:
A major negative aspect for many is the fact that a general partnership’s problems can affect a partner’s personal assets. Sometimes you can eliminate this issue and others by starting your business as a different legal entity, such as a limited partnership.
A general partnership is an unregistered business. There are generally no South Carolina general partnership registration requirements to start this kind of business. Unregistered general partnerships generally use the last names of all of their partners to name the business. If you want to opt for a name that’s different from your general partners’ names, you normally have to file paperwork with the government.
If you want to choose a general partnership name that doesn’t consist of your general partners’ last names, the alternative name you choose is a fictitious or assumed name. An assumed or fictitious business name is also called a “doing business as” name (DBA). If you need a local business license, you typically register your DBA with the city, county, or town where your business is at the same time.
As a business owner, you probably want to have as much input and control as possible when it comes to your business operations. If input and control are important to you, you’ll likely want to write a South Carolina General Partnership Agreement for your business. Without a Partnership Agreement, many of your business operations have to adhere to the default rules in South Carolina’s Uniform Partnership Act. South Carolina’s default rules could be a bad fit for your particular business needs. If you don’t want to follow the default rules, you can write your own rules in a Partnership Agreement. Partnership Agreements can create unique procedures for business matters such as:
To draft a solid set of Partnership Agreement terms that suit your needs, it’s often best to seek a legal professional’s help.
Even though your business doesn’t have to register as a general partnership in South Carolina, there’s a good chance your business will have to file some paperwork with the government to be legally compliant. Many general partnerships have to file paperwork to obtain business licenses, permits, and clearances. In many cases, permits, licenses, and clearances give you and your partners the authority to conduct business in the country, state, or city. You might need multiple licenses, and you might need to seek this authority at the federal, state, and local government levels. Common business licenses can include:
Determining which licenses and other authorizations you need at every level can be a labor-intensive undertaking. Fortunately, you don’t have to do all this work if you use our services. With our partners at Avalara, we can research and list all of your licensing and authorization needs in our South Carolina Business License Report.
An Employer Identification Number is an identifier for your business that you get from the IRS. General partnerships have to have EINs to file their federal taxes. We can handle obtaining your general partnership’s EIN for you with our Employer ID Number Service.
To pay certain state business taxes, you need a license from the South Carolina Department of Revenue. You can submit your tax registration application online or by mail. You normally need to pay a registration fee when you submit your application.
What’s your next move after forming a general partnership? Well, that depends on your unique business needs, but it’s often best to set up your finances right away. Immediately setting up a business bank account and obtaining insurance to protect your business is important. You can use your EIN to obtain accounts and necessary policies.
Life is usually easier when you have a good team behind you. We can be part of a winning team for your business. Our many business development and maintenance services can help you start and run your business smoothly. And you can use our Worry-Free Compliance Service to easily stay on top of your business obligations and remain legally compliant. We’re here to support your business from start to finish.
If you’re looking to start a limited liability company (LLC) or a corporation, both of which offer more robust liability protection, we have you covered. With our South Carolina LLC and South Carolina Corporation Formation Services, you can quickly get your business off the ground. We can also help your startup go smoothly with our South Carolina Operating Agreement Template and information on South Carolina Articles of Incorporation.
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.
In South Carolina, you don’t have to register a general partnership to start one. However, you’ll likely have to file other paperwork with the government to keep your general partnership legally compliant.
In general, South Carolina doesn’t make a general partnership pay income taxes at the entity level unless the business elects entity-level taxation. By default, general partnerships enjoy pass-through taxation, meaning only the partners pay income taxes on their share of the partnership profits.
Partners own an interest in the general partnership, and they have a right to manage the business. A partner can transfer their partnership interest to another person, but the new owner of the partnership interest doesn’t necessarily have a right to manage the business.
You can simply start a general partnership by going into business with a co-owner. Your partnership must either follow the business operations rules under South Carolina’s Uniform Partnership Act, or it must follow the rules you write in your signed Partnership Agreement.
Typically, all general partners are equally responsible for a general partnership’s debts.
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