Starting a General Partnership in Washington 2024: A Comprehensive Guide

by
How to Start a General Partnership in Washington

One crucial decision you will need to make when starting a general partnership in Washington 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 Washington, 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 Washington, 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 Washington

Starting a general partnership in Washington 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.

Recommended: Want to start a successful general partnership in Washington – hire a formation professional to help you establish a solid foundation. Team up for success today! We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online Partnership Setup

Start Washington General Partnership: Step-by-Step

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

Step 1: Choose a Business Name

The first step in starting a general partnership is choosing a business name in Washington that reflects your brand. You should search the name through the Washington Secretary of State Corporations and Charities Filing System‘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 180 days by submitting the required form and paying the name reservation fee.

To set your business on the right path, reach out to the best LLC formation services in Washington for professional guidance and support. Their expertise will ensure your LLC is established seamlessly, allowing you to focus on building a successful future for your venture!

LLC Services

Rating & Pricing

Top Features

Learn More

#1 Editor's Choice
Legalzoom

$0 + State Filing Fee

  • Free LLC Formation

  • Various Legal Services

  • Attorney Advice

Learn More

$299 + State Filing Fee

  • Single Package

  • Flat Pricing

  • Legal Services

Learn More

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 Washington, 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 Washington 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.

Recommended: Simplify the EIN process in Washington – trust a established service to obtain your general partnership’s tax ID effortlessly. Streamline your success journey today! We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online Partnership Setup

Step 4: Secure Licenses and Permits

Depending on your specific industry and location, your Washington 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 Washington 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.

Want some reliable expert advice on business licenses, permits, and compliance? Reach out to the best business attorneys in Washington who excel at tackling your industry’s legal ins and outs. With their friendly guidance, you’ll enjoy a smooth and worry-free experience handling your business needs!

Recommended: Want to kickstart your general partnership in Washington with confidence – hire a reliable formation service for hassle-free business licensing. Embark on your business venture today!

Our #1 Pick: LegalZoom – ($0 + State Fees) Online Partnership Setup

Step 5: Register for State and Local Taxes

Your Washington general partnership may be subject to various state and local taxes, such as payroll tax,  income tax, and sales tax permit in Washington. Register with the Washington State 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 Washington 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 Washington 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 Washington

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

  • Name Reservation Fee: When reserving a business name for your Washington general partnership, you may be required to pay a name reservation fee of $30 online or $30 mail. The fee varies by state, so it is essential to check with the Washington Secretary of State‘s office for the specific amount.
  • Filing Fees: Although general partnerships are not required to register with the Washington 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 $200 (online and $180 by mail). 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 Washington business licenses and permits to operate legally in Washington. 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 Washington State 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 Washington 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 Washington 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 Washington general partnership may involve fees, such as account maintenance fees or initial deposit requirements. Choose the best bank for your business in Washington. 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 Washington 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 Washington, 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 Washington and ensure you comply with all necessary regulations.

Benefits of a General Partnership

Washington 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 Washington 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

What is a general partnership in Washington?
A general partnership is a type of business structure in Washington where two or more people agree to run a business together, sharing profits and losses.
Can I start a general partnership in Washington on my own, without a partner?
No, you need at least one partner to start a general partnership in Washington.
How many partners can a general partnership have in Washington?
A general partnership can have two or more partners in Washington.
Do I need to file any formation documents with the state of Washington to start a general partnership?
No, there are no formation documents that need to be filed with the state of Washington to start a general partnership.
Do I need to register my general partnership with the state of Washington?
No, you do not need to register your general partnership with the state of Washington.
Can my general partnership have a different name than the partners’ names?
Yes, your general partnership can have a different name, but you need to file a doing business as (DBA) name with the county where your business is located.
Do I need to get a Washington state business license to start a general partnership?
Yes, all businesses operating in Washington need to have a state business license.
What kind of taxes does a general partnership in Washington need to pay?
A general partnership in Washington needs to pay state and federal income taxes, as well as self-employment tax.
How do I obtain an employer identification number (EIN) for my general partnership in Washington?
You can obtain an EIN from the IRS by applying online, by fax, or by mail.
Can one partner manage the business on behalf of all partners in a general partnership in Washington?
Yes, a single partner can manage the business on behalf of all partners in a general partnership in Washington.
Will I need an operating agreement for my general partnership in Washington?
While not required, it is recommended that you have an operating agreement in place for your general partnership in Washington.
What should be included in the operating agreement for my general partnership in Washington?
The operating agreement should include details about the distribution of profits and losses, management and voting rights, and decision-making procedures.
Can my partner assume personal responsibility for the debts and obligations of the general partnership in Washington?
Yes, each partner in the general partnership has personal responsibility for the debts and obligations of the business.
What is a capital account in a general partnership in Washington?
A capital account is a record of each partner’s investment in the general partnership.
Is it possible to dissolve a general partnership in Washington? If so, how can we do it?
Yes, a general partnership in Washington can be dissolved by a written agreement between all partners, through a court order, or by the death of a partner.
Will I need to file any documents when dissolving a general partnership in Washington?
No, you do not need to file any formal documents to dissolve a general partnership in Washington.
Can a partner withdraw their investment in a general partnership in Washington?
Yes, a partner can withdraw their investment from the general partnership in Washington, but they must follow the terms of the operating agreement.
Can a general partnership in Washington take on debt?
Yes, a general partnership in Washington can take on debt, but each partner is personally liable for the debt.
Can I admit new partners into my general partnership in Washington?
Yes, you can admit new partners, but you must follow the terms of the operating agreement.
Are there any special regulations for general partnerships in Washington?
No, general partnerships in Washington are not subject to any special regulations.
Do I need to be a Washington resident to start a general partnership in Washington?
No, you do not need to be a resident of Washington to start a general partnership in Washington.
Can I operate my Washington general partnership in other states?
Yes, a general partnership in Washington can operate in other states, but you may need to register your business with those states.
Can I use a PO box as the general partnership’s address to receive legal papers?
No, you cannot use a PO box as the general partnership’s address for legal purposes in Washington.
Can a general partnership own property in Washington?
Yes, a general partnership in Washington can own and operate property.
Can I use a personal bank account for my general partnership in Washington?
No, you need to set up a separate bank account for your general partnership in Washington.
How can I find a business lawyer to help with my general partnership in Washington?
You can find a business lawyer through the Washington State Bar Association or through referrals from friends and colleagues.
Will my general partnership in Washington be subject to sales tax?
Yes, your general partnership in Washington may be subject to sales tax if you engage in retail sales.
Is there anything else I need to know before starting a general partnership in Washington?
Yes, research and understanding of the Washington Uniform Partnership Act is crucial to establishing a general partnership in the state.
What is a general partnership?
A general partnership is a type of business organization where two or more individuals operate a business together.
What is required to start a general partnership in Washington?
To start a general partnership in Washington, you will need to register with the Washington Secretary of State.
Can non-residents start a partnership in Washington?
Yes, non-residents can start a partnership in Washington.
Is it necessary to have a written partnership agreement in Washington?
It is not required by law to have a written partnership agreement in Washington, but it is strongly recommended.
What information is required to register a general partnership in Washington?
Information required to register a general partnership in Washington includes the business name, a registered agent, and the names of all partners.
What is the fee for registering a partnership in Washington?
The fee for registering a partnership in Washington varies depending on the type of filing, but is typically between $200-$300.
Can a general partnership be registered online in Washington?
Yes, general partnerships can be registered online in Washington through the Secretary of State’s website.
Does Washington require partnerships to have a business license?
Yes, partnerships in Washington are required to obtain a business license.
How long does it take to register a partnership in Washington?
It typically takes 3-5 business days to register a partnership in Washington.
How is a general partnership taxed in Washington?
A general partnership in Washington is not taxed as an entity. Instead, profits and losses are passed through to individual partners and taxed on their personal tax returns.
Can a general partnership in Washington hire employees?
Yes, a general partnership in Washington can hire employees.
Is insurance required for general partnerships in Washington?
While not required by law, it is recommended for general partnerships in Washington to obtain insurance coverage.
Can a partner withdraw from a general partnership in Washington?
Yes, a partner can withdraw from a general partnership in Washington, but it requires following the guidelines laid out in the partnership agreement.
Can a partnership be dissolved in Washington?
Yes, a partnership can be dissolved in Washington by a unanimous decision by the partners or by court order.
Are general partnerships required to file annual reports in Washington?
Yes, general partnerships in Washington are required to file annual reports.
What should a partnership agreement include in Washington?
A partnership agreement in Washington should include the partner names, a description of the business, the profit/loss sharing arrangement, dispute resolution methods, and exit strategies.
How often does Washington require businesses to renew their business license?
Business licenses in Washington must be renewed annually.
Can two LLCs form a general partnership in Washington?
Yes, two LLCs can form a general partnership in Washington.
Can one person form a general partnership in Washington?
No, a general partnership requires two or more individuals to operate a business together.
What happens to a partnership in Washington when one partner dies?
When a partner dies in Washington, the partnership is typically dissolved unless otherwise specified in the partnership agreement.
Can partnerships in Washington have a DBA (doing business as) name?
Yes, partnerships in Washington can apply for a DBA name.
Is it required for a partnership in Washington to have a registered agent?
Yes, all partnerships in Washington are required to have a registered agent.
What is the Secretary of State’s role in registering a general partnership in Washington?
The Secretary of State is responsible for maintaining a registry of all registered partnerships in Washington.
Do partnerships in Washington need to keep records?
Yes, partnerships in Washington are required to keep accurate financial and business records.
Does Washington require partners to have a specific share percentage in the business?
No, Washington law does not require partners to have a specific share percentage in the business. This is typically determined in the partnership agreement.
Can partnerships in Washington limit their partners’ liability?
Yes, partnerships can limit partner liability by including specific provisions in the partnership agreement and following formal procedures.
Can an existing partnership register in a different state if they want to expand?
Yes, an existing partnership can register as a foreign entity in another state if they want to expand or conduct business there.
Where can I find further information about starting a general partnership in Washington?
Further information about starting a general partnership in Washington can be found on the Washington Secretary of State’s website or by consulting with a legal professional.

Also Read

Conclusion

Starting a general partnership in Washington 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 Washington partnerships. Visit LLCBase for more information about starting a general partnership in Washington.

Leave a Comment