In Louisiana, a **general partnership** is a type of business entity where two or more individuals agree to share the profits and losses of a business. General partnerships are relatively easy to create and have more or less straightforward legal obligations.
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If you're thinking of setting up a general partnership in Louisiana, keep reading. This article will guide you through the steps necessary to create and maintain a general partnership in the state.
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Step 1: Choose a Name for Your Partnership
Choosing a name for your partnership is the first step. The name must be available in Louisiana and should be distinguishable from other registered business entities in the state. You can search for available names through the Louisiana Secretary of State website.
Once you've found an available name, you need to register it with the Louisiana Secretary of State as a business entity. You can do this online or by mail. The filing fee is $100 as of 2021.
Step 2: Draft and Sign a Partnership Agreement
The partnership agreement is an essential document that formalizes the relationship between partners, outlining the rights and responsibilities that each partner has.
A partnership agreement typically includes provisions such as:
- The percentage of ownership that each partner holds
- Profit and loss distribution
- Management responsibilities
- Signatory authority
- Partner departure or termination procedures
Each partner must sign the partnership agreement to make it legally binding.
Step 3: Obtain Other Required Permits, Licenses, and Registrations
You will need to obtain other necessary permits, licenses, or registrations outside of the partnership agreement to operate your business effectively. Depending on the business you're running, you may be required to obtain state and local licenses, permits, and registrations.
Web-based businesses may require things such as:
- Registering with the Louisiana Department of Revenue for sales and use tax collection
- Registering for federal, state, and local employer tax identification
- Writing partnership bylaws to guide the relationships and responsibilities of the partners in the undertaking
Ensure you are aware of all the requirements of operating a business entity in Louisiana since compliance is essential.
Step 4: Acquire an Employer Identification Number (EIN)
An EIN is included with all Federal Partnership registrations along with all business entities that are recognized by the IRS. Applying for an EIN refer to the Internal Revenue Service (IRS) webpage, through phone or mail.
Generally speaking, privately owned small businesses don't have to pay any fee for acquiring an EIN.
Step 5: File an Initial Report with the Louisiana Secretary of State
Lastly,having an initial work report filed with the Louisiana Secretary of State's Office mandates that you file a report within the initial sixty days, in addition to an annual report each year by noting the name of the partnership, their main street address, and the names of each of the several partners.
Once a report is filed, you should receive an alert stating your partnership's renew account is good by email, mail, or both.
Conclusion
Let's wrap up. You now know what it takes to create a general partnership in Louisiana using the steps listed above.
To recap:
- Choose an available and unique name for your business
- Draft your partnership agreements with your cofounders/significant others
- Learn just what other permits, licenses, along registrations are required timely when conducting your company
- Request an EIN from the IRS
- And File your initial work survey
While formalizing the initial process, make sure to check all of Louisiana's legal regulations.
We hope you find this guide useful. Good luck launching your general partnership!
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