Discover the essentials of a Texas general partnership, where individuals collaborate in managing responsibilities and profits. Explore our guide below for key strategies, crucial for entrepreneurs navigating the diverse business scene of the Lone Star State.
Starting a business in Texas doesn’t have to be difficult. It can be as simple as deciding to go into business with one other person and creating a Texas general partnership. A partnership is one of the easiest business structures to use. Any time two or more people are doing business together, that’s a partnership.
Partners share in the responsibilities of running the business, the profits, and the losses. Learn how to create a Texas general partnership below.
You need to decide whether a partnership business structure will fit with your company’s plans. The pros and cons aren’t obvious, even though a general partnership is one of the easiest forms of a business you can create. Here are the positives and negatives we think are helpful to consider.
The ease of establishing a Texas general partnership is a big reason why many people go this route.
After you’ve weighed the pros and cons you can make a more informed decision. And once you’ve chosen to create a partnership, it’s time to move on to the next steps.
The name of your business can be just about anything, as long as it isn’t already in use. In order to check, use the Texas name search tool at the Texas Secretary of State website. Typically, most general partnerships use the names of the partners as the company name, but there’s no requirement that you do so.
Many partnerships operate under the names of the partners. However, sometimes partners decide to conduct business under an assumed name, which is commonly referred to as a “doing business as” or DBA name. If you decide to use a DBA name, then an assumed name certificate needs to be filed with the office of the county clerk where a business is located. If no business premise is maintained, then an assumed name certificate should be filed in all counties where business is conducted under the assumed name.
A partnership generally operates in accordance with the rules and obligations set up in a Partnership Agreement. However, there’s no requirement that a Texas General Partnership Agreement is in writing, and there’s no state filing requirement. Even though state law doesn’t require a Partnership Agreement, it’s still a good idea to write one up. This way, all the partners will understand what’s expected and everyone will be on the same page as to the rules and responsibilities. It’s also a good way to establish a protocol to resolve any conflicts that may arise between the partners.
When starting a new business, you may not know which licenses, permits, and clearances are necessary from various government agencies. But this is important because, without them, you won’t be able to legally operate your company. That’s why we partner with Avalara to provide you with a Business License Report. Our goal through this service is to help ensure that you won’t miss any licensing or permitting needs. We can quickly provide you with the information necessary to contact the right agencies and offices to fulfill your licensing requirements.
You need an employer identification number (EIN) to legally operate your business. This is like a social security number for your company, and it allows you to pay taxes, open checking accounts, get loans, and perform other business tasks. We offer an Employer ID Number Service so that you can quickly request and receive your EIN and get started as soon as possible.
There is no separate business identification number for Texas, other than the EIN that is distributed by the IRS. However, if you’re going to be a retailer, you’ll have to apply for a sales and use tax account.
After completing these steps, you might want to talk to an insurance professional to discuss what business insurances you should purchase. Also, contact a tax and accounting professional with any detailed questions regarding using a general partnership to structure your business.
A Texas general partnership is a great way to quickly start your business. It doesn’t take much leg work to get it up and running. We can help you every step of the way with our business development and maintenance services, including our Worry-Free Compliance Service.
If you ultimately decide a general partnership in Texas isn’t right for your plans, we also offer help with setting up a Texas LLC or a Texas corporation. We can help you with everything, including drafting and filing a Certificate of Formation for a corporation and filing your Operating Agreement for an LLC.
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.
No. Forming a partnership in Texas doesn’t require you to register with the state. So you don’t have to register as a general partnership in Texas to create and start operating your company.
A business partnership in Texas isn’t subject to state tax. They aren’t taxed at the partnership level, nor are they taxed at the individual level for the partnership profits they receive.
Each partner to a general partnership owns the business and has a right to run the company’s operations. An owner obviously has an ownership interest, but they may or may not have the right to run the company depending on the agreement between the parties.
A Texas general partnership is organized in a way that all of the partners are equal in their ownership of the company unless they decide on some other distribution of the profits. This should be outlined in a Partnership Agreement, although this document isn’t required by law.
Every partner is responsible for the debts and obligations acquired by the general partnership.
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