Starting a General Partnership in Missouri 2024: A Comprehensive Guide

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How to Start a General Partnership in Missouri

One crucial decision you will need to make when starting a general partnership in Missouri is choosing the right legal structure. A general partnership is popular for many entrepreneurs due to its simplicity and flexibility. As a general partnership, you and your partners can share profits and losses, manage the business together, and avoid the costs and regulations associated with other business structures.

However, like starting an LLC in Missouri, forming a general partnership requires careful planning and attention to legal and regulatory requirements. This guide will provide the information you need to set up a general partnership in Missouri, including choosing a name, registering with the state, and obtaining necessary permits and licenses. At LLCBase, we understand that forming a general partnership can be an overwhelming experience, so we are here to help you every step of the way.

Start a General Partnership

What is a General Partnership

A general partnership is a business structure where two or more people share ownership and management responsibilities. In a general partnership, each partner contributes to the business and shares profits and losses. Unlike a limited liability company (LLC) or a corporation, a general partnership does not offer limited liability protection to its partners. Each partner can be personally liable for the business’s debts and obligations.

Why Start a General Partnership in Missouri

Starting a general partnership in Missouri is a simple and cost-effective way to structure a business, particularly for small enterprises or those with limited resources. General partnerships are relatively easy to set up and maintain, with fewer formalities than other business structures. They also offer more flexibility in management and decision-making, as partners can divide responsibilities and make decisions collectively.

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Start Missouri General Partnership: Step-by-Step

The following is a thorough guide on the steps to start a general partnership in Missouri:

Step 1: Choose a Business Name

The first step in starting a general partnership is choosing a business name in Missouri that reflects your brand. You should search the name through the Missouri Secretary of State Business Services‘s database to ensure that the name is not already used. Consider factors such as industry relevance, memorability, and potential trademark conflicts. Once you have chosen a name, you can reserve it for up to 60 days by submitting the required form and paying the name reservation fee.

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Step 2: Draft and Sign a Partnership Agreement

A partnership agreement is a crucial document that outlines the terms and conditions of the general partnership, including each partner’s responsibilities, profit-sharing arrangements, and procedures for resolving disputes. While not legally required in Missouri, it is highly recommended to draft and sign a partnership agreement to avoid potential misunderstandings and conflicts down the line. Consult with an attorney or utilize online legal services to create a comprehensive agreement that covers all aspects of your partnership, such as capital contributions, decision-making processes, and exit strategies.

Step 3: Get an EIN

An EIN, or Employer Identification Number, is a unique nine-digit number the Internal Revenue Service (IRS) assigns for tax purposes. You can obtain an EIN for your Missouri general partnership by applying online through the IRS website or via mail by submitting Form SS-4. This number will be used when filing taxes, securing licenses and permits, and opening a bank account for your business.

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Step 4: Secure Licenses and Permits

Depending on your specific industry and location, your Missouri general partnership may require certain licenses and permits to operate legally. These requirements vary greatly and may include professional licenses, zoning permits, and environmental permits. You can consult the Missouri Secretary of State for information on required licenses and permits for your business or use the U.S. Small Business Administration’s (SBA) guide to find relevant resources. Ensure all necessary documentation before starting operations to avoid penalties and fines.

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Step 5: Register for State and Local Taxes

Your Missouri general partnership may be subject to various state and local taxes, such as payroll tax,  income tax, and sales tax permit in Missouri. Register with the Missouri Department of Revenue to ensure proper tax compliance and reporting. Additionally, consult with a tax professional or accountant to understand your tax obligations and the best strategies for minimizing your tax burden.

Step 6: Open a Bank Account

Finally, you should open a separate bank account for your Missouri general partnership to separate your personal and business finances. This will make it easier to manage your business’s finances and maintain accurate records for tax purposes. When opening a business bank account, consider factors such as account fees, transaction limits, and access to credit. Research various financial institutions to find the best fit for your partnership’s needs and provide the required documentation to open the account, such as your EIN, partnership agreement, and business licenses.

By following these step-by-step guidelines, you can successfully establish your Missouri general partnership and set your business on the path to success. Remember to stay compliant with all state and federal regulations and consult with professionals when necessary to ensure the smooth operation of your partnership.

Fees for Starting a General Partnership in Missouri

Here are the fees associated when starting a general partnership in Missouri:

  • Name Reservation Fee: When reserving a business name for your Missouri general partnership, you may be required to pay a name reservation fee of Not available online or $25 mail. The fee varies by state, so it is essential to check with the Missouri Secretary of State‘s office for the specific amount.
  • Filing Fees: Although general partnerships are not required to register with the Missouri Secretary of State, some states may require you to file a statement of partnership authority or similar documentation. A filing fee may be associated with this process, which could be around $105 (by mail and $50 online). Again, consult the Secretary of State’s office for specific details and fees.
  • Licenses and Permits: Depending on the nature of your general partnership’s business, you may need to obtain various Missouri business licenses and permits to operate legally in Missouri. These can include professional licenses, zoning permits, and environmental permits. Fees for these licenses and permits vary depending on the requirements and the issuing agency. Contact the Missouri Department of Revenue for more information about the necessary licenses and permits and their associated fees.
  • Employer Identification Number (EIN): Obtaining an EIN for your Missouri general partnership is free through the Internal Revenue Service (IRS) website. However, if you use a third-party service to obtain your EIN, they may charge a fee for their assistance.
  • Partnership Agreement: While not legally required, drafting and signing a partnership agreement is highly recommended for Missouri general partnerships. You may consult an attorney to help draft this agreement, which can result in legal fees. Alternatively, you can use online legal services or templates to create a partnership agreement at a lower cost.
  • Bank Account: Opening a bank account for your Missouri general partnership may involve fees, such as account maintenance fees or initial deposit requirements. Choose the best bank for your business in Missouri. Contact your chosen financial institution for information on their specific fees for business accounts.

Types of General Partnerships

Here are the four types of general partnerships in Missouri that you might want to consider:

  1. Professional General Partnership: A professional general partnership is formed by professionals, such as doctors, lawyers, engineers, or architects, who provide services within their respective fields. This type of partnership is ideal for individuals who want to combine their expertise and resources to offer specialized services to clients. A professional general partnership could be the right choice if your business involves a group of professionals working together.
  2. Family General Partnership: A family general partnership is formed by family members who pool their resources to start and manage a business together. This type of partnership is popular among families who want to keep their business operations within the family unit. A family general partnership may be the best option if you plan to start a business with your relatives.
  3. Investment General Partnership: An investment general partnership involves partners pooling their financial resources to invest in stocks, real estate, or other investment opportunities. This type of partnership suits individuals who want to work together to manage their investments and share profits and losses. If your primary objective is to invest together with others, consider forming an investment general partnership.
  4. Retail or Service General Partnership: Retail or service general partnerships are formed by individuals who want to start a retail store, restaurant, or other service-oriented businesses. In this type of partnership, the partners work together to manage the business’s day-to-day operations, share responsibilities, and split profits and losses. If you want to start a business in the retail or service sector with one or more partners, this type of general partnership could be a good fit.

Choosing the Right General Partnership

To choose the right type of general partnership in Missouri, consider the following factors:

  • Business objectives: Identify the primary goals of your business and choose a partnership type that aligns with those objectives.
  • Expertise: Assess the skills and expertise of each partner to determine which type of partnership would benefit from their combined knowledge and experience.
  • Liability: Understand the liability implications of each type of general partnership, as partners in a general partnership can be personally liable for the business’s debts and obligations.
  • Tax implications: Consult with a tax professional to understand the tax implications of each type of partnership and choose the one that offers the most favorable tax treatment for your situation.
  • Regulatory requirements: Research the specific regulatory requirements for your chosen partnership type in Missouri and ensure you comply with all necessary regulations.

Benefits of a General Partnership

Missouri general partnership offers several benefits, including:

  1. Ease of formation and management: General partnerships are relatively simple compared to corporations or limited liability companies (LLCs). A partnership is often formed automatically when two or more people engage in a business without formal documentation. However, it is recommended that partners create a written partnership agreement to outline the terms and conditions of their relationship and protect their interests in case of disputes.
  2. Flexibility in dividing responsibilities and decision-making among partners: General partnerships allow partners to decide how to manage the business, including dividing responsibilities and making important decisions. Each partner can contribute their unique skills and expertise to the operation.
  3. Pass-through taxation: One of the primary benefits of a general partnership in Missouri is pass-through taxation. This means that the partnership itself does not pay taxes on its income. Instead, profits and losses are reported on each partner’s tax return, avoiding the double taxation issue corporations face.
  4. Shared financial responsibility and resources: Partners in a general partnership can pool their financial resources to help fund the business’s start-up costs and ongoing expenses. This can be especially beneficial for small businesses that may not have access to other sources of financing, such as loans or investors.

However, consider that general partnerships do not provide the same level of liability protection as corporations or LLCs. Each partner is personally liable for the debts and obligations of the partnership, which means their personal assets could be at risk in case of legal issues or financial difficulties. Therefore, it is essential to weigh the benefits and risks of a general partnership before deciding on this business structure.

FAQs

Who can be in a general partnership in Missouri?
Any individual, corporation, partnership, association, or other legal entity may be a partner in a Missouri general partnership.
What is the process to form a general partnership in Missouri?
The process requires filing a registration statement and certificate of partnership with the Missouri Secretary of State.
How much does it cost to register a general partnership in Missouri?
The filing fee for a Missouri general partnership is $50.
Do I need a lawyer to form a general partnership in Missouri?
You do not need a lawyer to form a Missouri general partnership, but it is recommended to consult with one to ensure compliance with state laws and regulations.
How many partners are required to start a general partnership in Missouri?
At least two partners are required to form a Missouri general partnership.
What are the benefits of forming a general partnership in Missouri?
The benefits include ease of formation, shared profits and losses, and flexibility in management and decision making.
What are the recordkeeping requirements for a Missouri general partnership?
A Missouri general partnership must maintain accurate records of financial transactions and keep copies of tax returns and other financial documents.
Do Missouri general partnerships have to file annual reports?
No, Missouri general partnerships do not have to file annual reports.
What are the tax implications for a Missouri general partnership?
A Missouri general partnership is a pass-through entity, meaning the partnership itself does not pay taxes on profits, but the partners must report the profits on their individual tax returns.
How are the profits and losses distributed in a Missouri general partnership?
Profits and losses are distributed according to the partnership agreement.
Can partners enter into a partnership agreement that overrides Missouri state law?
Yes, partners may enter into a partnership agreement that overrides the default rules in Missouri state law.
How long does it take to register a general partnership in Missouri?
The registration process can take up to 14 business days.
Do Missouri general partnerships require a business license?
Yes, general partnerships are required to obtain a business license to operate in Missouri.
Can partners have different amounts of capital contributions in a Missouri general partnership?
Yes, partners can have different amounts of capital contributions in a Missouri general partnership.
Are partners in a Missouri general partnership liable for debts and obligations of the partnership?
Yes, partners are jointly and individually liable for all debts and obligations of the partnership.
Can a partner be held personally liable for the wrongful acts of another partner in a Missouri general partnership?
Yes, partners can be held personally liable for the wrongful acts of another partner in a Missouri general partnership.
What happens if a partner withdraws from a Missouri general partnership?
If a partner withdraws, the partnership may be dissolved or continue with the remaining partners.
Can a Missouri general partnership be converted to a different entity structure?
Yes, a general partnership in Missouri can be converted to a different entity structure, such as an LLC or corporation.
Can partnerships be formed for a limited period in Missouri?
Yes, partnerships can be formed for a specified period or for a particular project in Missouri.
Is it mandatory to file a partnership agreement when registering a Missouri general partnership?
No, it is not mandatory to file a partnership agreement when registering a Missouri general partnership, but it is recommended to have one.
Can a Missouri general partnership have a trade name?
Yes, a Missouri general partnership can have a trade name, as long as it meets state regulations.
What happens when a partner dies in a Missouri general partnership?
The partnership may be dissolved or continue with the remaining partners, depending on the partnership agreement and/or state law.
Can a Missouri general partnership be registered to do business in another state?
Yes, a Missouri general partnership can register to do business in other states by filing for a foreign qualification.
Can a general partnership have employees in Missouri?
Yes, a Missouri general partnership can have employees and must comply with state and federal employment laws.
What happens if a Missouri general partnership is sued?
Each partner may be named in a lawsuit and held jointly and individually liable for damages.
Can partners in a Missouri general partnership restrict their ability to transfer ownership interests?
Yes, partners may restrict the transfer of ownership interests in a Missouri general partnership.
Are partners in a Missouri general partnership considered employees of the partnership?
No, partners in a Missouri general partnership are not considered employees.
What other legal requirements must be met when starting a Missouri general partnership?
It is important to comply with local and state zoning and licensing laws, obtain necessary permits, and register for state and federal taxes.
What is a general partnership in Missouri?
A general partnership in Missouri is a business structure where two or more individuals own and operate a business together and share profits and losses.
What are the requirements to start a general partnership in Missouri?
In Missouri, there are no formal registration requirements for a general partnership. However, partners may choose to file a “Declaration of Partnership” with the secretary of state’s office.
Can a general partnership be operated under a different name than the legal names of the partners in Missouri?
Yes, a general partnership in Missouri can operate under a different name as long as it has filed a “Declaration of Partnership” that includes the assumed name.
Who can form a general partnership in Missouri?
Any individual who is over the age of 18 and has the legal capacity to enter into contracts can form a general partnership in Missouri.
What is the liability for partners in a general partnership in Missouri?
In Missouri, partners in a general partnership have unlimited liability for the business’s debts and obligations.
Are partnerships required to file annual reports in Missouri?
No, partnerships are not required to file annual reports with the Missouri secretary of state’s office.
How are profits and losses in a general partnership in Missouri distributed to partners?
Profits and losses in a general partnership in Missouri are typically distributed based on the partnership agreement and the contribution levels of each partner.
Is a written partnership agreement required in Missouri?
No, a written partnership agreement is not required in Missouri. However, partners are strongly encouraged to have a written agreement that outlines each partner’s roles, responsibilities, and compensation to avoid potential disputes.
Can partners in a Missouri general partnership have different amounts of capital contributions?
Yes, partners in a Missouri general partnership can have different amounts of capital contributions as long as the partnership agreement allows for it.
Is there a required business license to operate a general partnership in Missouri?
In Missouri, general partnerships are not required to obtain a business license. However, certain occupations may require a state or local license.
Can a general partnership own property in Missouri?
Yes, a general partnership in Missouri can own property and assets in its name.
How are taxes paid for a general partnership in Missouri?
General partnerships in Missouri are taxed as pass-through entities, which means that profits and losses are reported on each owner’s personal tax return. Partners are responsible for reporting their share of any partnership income and paying taxes on it.
What happens when a general partnership in Missouri dissolves?
When a general partnership in Missouri dissolves, the remaining assets are distributed among the partners according to the partnership agreement.
Can a general partnership foreign to Missouri operate in Missouri?
Yes, a general partnership foreign to Missouri can operate in Missouri as long as it registers with the Missouri secretary of state’s office and obtains all required licenses and permits.
Is there a requirement for the general partnership to have a physical office in Missouri?
No, a general partnership in Missouri is not required to have a physical office located within the state.
How is funding for a Missouri general partnership typically sourced?
Funding for a Missouri general partnership is typically sourced through personal investments by the partners, loans, or other forms of financing.
Are partnerships required to have a registered agent in Missouri?
No, partnerships are not required to have a registered agent in Missouri.
Can a general partnership sell products and services online in Missouri?
Yes, a general partnership in Missouri can sell products and services online, provided the partnership meets all licensing and registration requirements.
How can partners avoid disputes in a general partnership in Missouri?
Partners can avoid disputes in a general partnership in Missouri by having a written partnership agreement that outlines each partner’s roles, responsibilities, and compensation.
What is the process for ending a general partnership in Missouri?
The process for ending a general partnership in Missouri is dictated by the partnership agreement, if one exists, or by state law if there is no agreement. Generally, the partnership must be dissolved, and the partners must follow the procedure for winding down the business and distributing any remaining assets.
What fees are associated with starting a general partnership in Missouri?
There are no formal registration or filing fees associated with starting a general partnership in Missouri. However, there may be licensing fees associated with certain professions or occupations.
Can a general partnership in Missouri get sued individually and as a group?
Yes, individual partners can be sued, and the general partnership as a whole can be sued in Missouri.
Who is responsible for the debts of a general partnership in Missouri?
In Missouri, each partner is responsible for the debts of the general partnership. This means that creditors can go after each partner’s personal assets to satisfy any outstanding debts.
What happens if a partner dies or becomes incapacitated in a general partnership in Missouri?
If a partner dies or becomes incapacitated in a general partnership in Missouri, the partnership may need to be dissolved and its assets distributed to the remaining partners or to the deceased/incapacitated partner’s heirs or legal representatives, according to the partnership agreement.
Can partners in a general partnership be held personally liable for each other’s actions in Missouri?
Yes, partners in a general partnership can be held personally liable for the actions of other partners in Missouri.
Are there any advantages of forming a general partnership in Missouri?
Some advantages of forming a general partnership in Missouri include ease of startup, minimal regulatory paperwork, each partner’s ability to participate in management, and a lower tax burden compared to some other business structures.
Can a general partnership in Missouri convert to another business structure, such as an LLC or corporation?
Yes, a general partnership in Missouri can convert to another business structure, such as an LLC or corporation, if it meets the legal and regulatory requirements for the new structure.
Are there any disadvantages of forming a general partnership in Missouri?
Some disadvantages of forming a general partnership in Missouri include unlimited liability for each partner’s actions and debt, potential for disputes among the partners, and the fact that a partnership is not considered a separate legal entity from its owners.

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Conclusion

Starting a general partnership in Missouri is a straightforward process that offers numerous benefits for entrepreneurs. By following these steps and staying compliant with all necessary regulations, you can set your business up for success and join the ranks of thriving Missouri partnerships. Visit LLCBase for more information about starting a general partnership in Missouri.

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