Discover how a Wyoming general partnership works as individuals come together to handle tasks and share profits. Dive into our guide below for crucial insights that empower you to navigate this collaborative business structure successfully.
A general partnership, by definition, is the association of two or more people who run a for-profit business as co-owners. Typically, general partners share partnership profits and losses equally. If you want to start your own business with a co-owner, a general partnership can be a great option.
Below, we review how to form a general partnership and what benefits and disadvantages can be involved.
Should you consider starting and running a general partnership in Wyoming? Let’s take a look at the common pros and cons of starting a general partnership.
Among the many attractive qualities of a general partnership are:
Starting up and running a general partnership can be relatively simple, but this business structure might not be your best option if you want your business to be a long-term venture. General partnerships are normally better suited for short-term business projects, while a long-term business project might require the structure of a more formal entity.
There are potential downsides to running a general partnership, including:
A stand-out pitfall of a general partnership is the fact that the business’s legal and financial problems can affect a general partner’s personal assets. One way to minimize this issue is to start a different type of partnership, such as a limited partnership, limited liability partnership, or limited liability limited partnership.
In general, your business’s name is its calling card. Choosing a name for your general partnership can be as simple as using the legal names of all your general partners, or you can choose a different or more creative name.
You don’t have to register as a general partnership in Wyoming, and unregistered general partnerships normally use the names of all their general partners to name the business. Any business name you choose that’s different from all the general partners’ names might involve filing paperwork with the state.
General partnership names that aren’t the same as the names of the general partners are “doing business as” or DBA names. These can also be called trade names. To register your business’s trade name with the state, your business has to be in good standing, and you have to submit an Application for Registration of Trade Name and filing fee to the Secretary of State.
Control and freedom can be two of the best perks of becoming a new business owner. To make the most out of these perks in a general partnership, it’s often best to write a Wyoming General Partnership Agreement. A Partnership Agreement allows you to make many of your own rules about how to operate your business, including rules about:
If you don’t write a Partnership Agreement for your business, the way you handle your business matters is subject to the default rules in the Wyoming Uniform Partnership Act. It might seem easy to just follow the business operations rules of the Uniform Partnership Act, but these default rules weren’t created with your specific business needs in mind and might cost you in the long run. It’s often best to customize your business operations rules when you can.
While it’s true that you don’t have to fulfill any Wyoming general partnership registration requirements to form your general partnership, you’ll likely still have to file paperwork to keep your business legally compliant. Most businesses need some kind of authorization from the government before they can operate. These authorizations normally come in the form of licenses, permits, and clearances.
Depending on the nature of your business, you might need multiple authorizations, and you might need them from federal, state, and local government authorities. Common licenses or authorizations you might need from the state include:
Often, the bulk of a business’s licensing obligations come from the city or municipal government. You want to take a look at your city websites to check on their licensing requirements for businesses.
The amount and kinds of business licenses you need are generally based on your location, business activities, and business needs. How do you determine which licenses you need? You usually have to do significant research, and it can be overwhelming. But we can help. Our partners at Avalara will research your business licensing needs and provide you with a list of your licensing obligations with our Business License Report.
Keeping up with your tax obligations is a large part of running a successful business. To properly pay federal taxes, general partnerships must have an Employer Identification Number (EIN). You get your EIN from the IRS, and you use it to identify your business on your tax paperwork. To make obtaining an EIN a quick and easy process, you can use our Employer ID Number Service.
Your general partnership likely needs to file returns and/or pay a number of state taxes as well. To conveniently pay your business taxes online, you need to set up a profile with the Wyoming Internet Filing System for Business.
Once you’ve set up your new general partnership, it’s usually a good time to protect your business assets with bank accounts and insurance. You can use your EIN to open new accounts and secure new policies for your general partnership.
We know that you have to keep track of a lot of details as a business owner to keep it up and running. That’s why we’re here. From formation onward, we have the tools, services, and support that you need to help achieve your entrepreneurial goals. Contact us today to see how we can help.
If you already know that a general partnership doesn’t fit your business plan, we can help you start a more formal business entity, such as a limited liability company (LLC) or a corporation. You can use our Wyoming LLC or Wyoming Corporation formation services to help start your business in no time at all, and check out our full slate of formation and compliance tools and services to see how we can make starting, running, and growing your business less stressful.
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.
You don’t have to register a general partnership to form one in Wyoming, but you might need to file other paperwork to remain legally compliant.
General partnerships don’t have to pay income taxes at the entity level. Instead, general partners pay income taxes from their portion of the business income. However, a general partnership might have to pay other business-related taxes.
General partners own a portion of the general partnership’s profits and have the right to manage the business. General partners can transfer their portion of the profits to someone else, but the new owner doesn’t necessarily have a right to manage the business.
When you enter into a for-profit business with a co-owner, you form a general partnership. Either the Wyoming Uniform Partnership Act or your own Partnership Agreement dictates rules for your business operations.
Typically, all general partners are equally responsible for a general partnership’s debts.
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