Form a General Partnership in Washington

Discover the fundamentals of a Washington general partnership, where people work together to handle tasks and split profits. Check out our guide for key information, providing valuable advice for entrepreneurs navigating Washington’s dynamic business scene.

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In a typical Washington general partnership, the founding partners share responsibility for the business, including liability for its debts and obligations. Learn more with our step-by-step guide on how to form a general partnership.

Step 1: Determine if you should start a general partnership

To form a business partnership in Washington, all you need to do is to agree to run a business and share the profits. While the formation process is simple, you might actually want your business to have some of the legal protections of another business form. We recommend reflecting on your business goals and what you want to accomplish with your business.

Pros

The general partnership structure has the following benefits:

  • It’s simple to form
  • Low maintenance and few formalities
  • Uses “pass-through” taxation (no federal income taxes at the entity level)
  • Partners share the profits, losses, and management of the business

Because you can specify the length of time that the partnership will last, it’s usually the best form for short-term projects. You might consider another business structure if you want to run the business long-term or sell the business when it succeeds.

Cons

General partnerships also have drawbacks:

  • Unlimited joint and several liabilities
  • Responsibility for another partner’s negligence or malpractice
  • Potential restrictions on transferring your ownership interest
  • Fewer options for raising capital

Before you make any final decisions, consult your legal or financial advisor. While we’ve shared some of the pros and cons, only a professional can review your circumstances and recommend the business structure that will meet your goals.

Step 2: Choose a Business Name

Once you’ve chosen a business structure, the next thing to consider is what to name the partnership. Your name will be the public face of your business and represent its goodwill. Because you don’t have to register before operating as a partnership, unregistered partnerships will use the full, legal names of the partners. If you choose to use a different name, you’ll need to register.

Step 3: File a DBA Name (if needed)

Before your business can operate under a name other than the partners’ names, you’ll need to register with the Washington Department of Revenue (DOR). Known as a “doing business as,” “DBA,” “assumed,” or “trade” name, registering your name allows the public to identify the business owners. In Washington, you’ll complete a Business License Application to register as a general partnership.

Step 4: Draft and sign Partnership Agreement

In Washington, the general partnership agreement sets the formal rules for running the business. You can set rules for when a partner can leave (dissociate), what might cause the partnership to dissolve, and the rights of the partners. While a written agreement is best, your Partnership Agreement might be oral or implied from the partners’ conversations. If you haven’t discussed the details, the law requires you to resolve your legal disputes following the Washington Revised Uniform Partnership Act.

Step 5: Obtain licenses, permits, clearances

Before you can legally operate your general partnership in Washington state, you’ll need a Washington State Business License. The Washington State Department of Revenue manages state licenses and can help you find the city, state, and federal licenses your business may need. You’ll also want to see if your business activities will require you to obtain other state licenses. Finding all the licenses you need can take time. With our partners at Avalara, we can help by creating a Business License Report that identifies the licensing and permitting your business needs at every level of government. 

Step 6: Get an Employer Identification Number (EIN)

One important step for every new business is to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). General partnerships need an EIN to report their taxable income and wage withholding. Obtaining an EIN can be another task to complete, but we can handle that application for you with our Employer ID Number Service

Step 7: Get Washington State Tax Identification Numbers

In addition to fulfilling the federal requirements, your business will need to register for a Washington State Unified Business Identifier (UBI) number or tax registration number. The Washington Department of Revenue handles the Business License Application (BLA) you use to apply.

Your partnership needs a UBI to pay the state business and occupation (B&O) tax, which is based on business entity income. In addition, partnerships often need to register for certain business activities such as sales and use taxes and wage withholding. Don’t forget to check if you need to register for local B&O taxes.

Forming a Business Partnership in Washington: Next Steps

Once you’ve obtained your Washington State Business License and EIN, you can open a business bank account exclusive to the partnership. Discuss with your partnership what level of insurance your new business needs. Working together to plan goals for the partnership is also a common step to starting out.

How We Can Help

Our business experts understand the choices you have to make as a new business owner. While forming a general partnership in Washington State is simple to do, you still have paperwork to file and applications to complete. Let us help you with our curated business development and maintenance services, including our Worry-Free Compliance Service, which can help you easily fulfill many of your business obligations. 

We can help you decide what business structure is right for you. If you decide on another business form, we offer Formation Services to help you start a Washington LLC or a Washington Corporation.

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.

Washington General Partnership FAQs

  • Washington state doesn’t require registration to form a general partnership. However, you will need to register to use a name different from the partners’ names or to obtain a license for certain business activities.

  • General partnerships must pay the state business and occupation (B&O) tax.

  • In most cases, the owners of a general partnership are called partners. If you transfer your ownership interest, the transferee who now owns the interest may not have the power to make operational decisions. If you register your partnership as a limited partnership, the owners with the power to make decisions are called general partners. Owners who merely contribute capital or resources are called “limited partners” or “silent partners” and enjoy limited liability for the general partner’s decisions.

  • In the general partnership, the partners run the company together. They share the power to make operational decisions and split the profits equally.

  • The partners are joint and severally liable for the debts of the partnership. However, creditors can reach the individual partners’ personal assets only after they exhaust the partnership assets.

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