General Partnership Business Formation

General Partnership Business Formation

A partnership is a business structure where two or more individuals collaborate and share ownership of a single business. It allows multiple people to combine their skills, resources, and efforts in managing a joint business through cooperation and collective decision-making.

There are different partnership options, such as General Partnerships (GP), Limited Partnerships (LP), and Limited Liability Partnerships (LLP).  The choice of partnership type depends on factors such as the desired level of liability exposure, profit distribution, management control, and the formality required for the business structure. A General Partnership (GP) does not require formal documents to establish business formation. 

General Partnership (GP):

  • Formed by two or more individuals or entities.
  • All partners bear unlimited personal liability for the business’s debts and obligations.
  • Each partner has an equal right to participate in the management of the business.

Limited Partnership (LP):

  • Consists of at least one general partner with unlimited liability and one or more limited partners.
  • Limited partners have limited liability, risking only their invested amount.
  • Limited partners are restricted from participating in management decisions.

Limited Liability Partnership (LLP):

  • Comprised of partners who are individually liable only for their own negligence or wrongful acts.
  • Designed to provide liability protection similar to a corporation.
  • LLPs are frequently adopted by groups of medical professionals, such as physicians or dentists, seeking to limit their liability exposure.

 

The steps below are for forming a General Partnership (GP). For assistance with a Limited Partnership (LP) or Limited Liability Partnership (LLP), we recommend consulting with a professional.


Register the Business Name

To register for a General Partnership (GP) trade name , file an Application for Registration of Trade Name form provided by the Nebraska Secretary of State’s office. General Partnerships can use their legal name or implement a different trade name/doing business as (DBA) designation. Requiring the registration of trade names or DBA helps in recognizing who owns the business. The selected name must be unique from other business names registered within Nebraska.

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Proof of Publication 

Publish: Publish a notice of your business name registration in a local newspaper.

Obtain: Request an Affidavit/Proof of Publication from the newspaper, which serves as proof that you have published the notice.

Submit: Send a copy of the Affidavit/Proof of Publication to the Nebraska Secretary of State.

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Partnership Agreement

A partnership agreement is a document that aligns and establishes the roles and responsibilities of business partners. Nebraska does not have a law stating that you must have an agreement, but it will be required for opening a business bank account.

Partnership agreements determine management procedures including the dissolution of a business partnership. This document outlines a basis for the partnership, ensuring that all partners are working towards a common interest of the business. By clearly defining business operations, transparency is increased among business partners.

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Additional Steps

To understand your tax obligations as a business owner, consult the Business Tax section of the Business Formation eGuide. This resource covers both federal and state tax registration processes and requirements. Key steps include acquiring an Employer Identification Number (EIN) from the federal government and a Nebraska Identification Number (Form 20) from the state. Additionally, familiarize yourself with self-employment taxes, as they will likely apply to your situation.