A general partnership is a type of business entity in Nebraska where two or more people carry on a business for profit. This article will guide you through the process of creating a general partnership in Nebraska.
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Step 1: Choose a Business Name
The first step to creating a general partnership in Nebraska is choosing a business name. The name you choose must be unique and not already registered by another business entity in Nebraska. You can check the availability of a business name by using the Nebraska Secretary of State's website.
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Once you have the name, register it with the Nebraska Secretary of State to prevent others from using it. You can add a legal ending like "partners" or "associates" to indicate that you are creating a general partnership.
Step 2: Obtain an EIN
Every business in Nebraska, including a general partnership, must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is necessary to open a business bank account and hire employees if needed.
To obtain an EIN, you can apply online through the IRS website. The process is quick and free.
Step 3: Create a Partnership Agreement
A partnership agreement is a legal document that outlines the terms and conditions of a general partnership. It covers how partners share profits and losses, what happens if a partner leaves or dies, and the decision-making process.
It is not necessary for a general partnership to have a partnership agreement, but it is beneficial to have everything in writing to avoid disputes and confusion in the future.
The partnership agreement can be created by a lawyer or using an online template. It must be signed by all partners.
Step 4: Register the Partnership
Nebraska law requires all general partnerships to register with the Nebraska Secretary of State's office. You can file the registration online or by mail.
The registration form asks for basic information about the partnership, including the name, address, and the names of all partners. The filing fee is $100.
Step 5: Obtain Local Licenses and Permits
Depending on the type of business, you may need to obtain local licenses and permits to operate in Nebraska. The requirements vary by city and county.
You can contact your local government office to determine what licenses and permits are needed. Failure to obtain any necessary licenses or permits can result in fines or even closure of the business.
Step 6: Open a Business Bank Account
It is essential to keep business and personal finances separate in a general partnership. To do this, open a business bank account in the name of the partnership.
When opening the account, bring the partnership agreement, EIN, and registration certificate, and identification documents of all partners.
Step 7: Comply with Tax Requirements
General partnerships in Nebraska must file an annual tax return with the Department of Revenue. Partnerships do not need to pay income tax, but instead, the profits and losses are passed through to the partners.
Each partner reports their share of income or loss on their individual tax return. Partnerships must also collect and remit sales tax if they sell taxable goods or services.
In Conclusion...
Creating a general partnership in Nebraska is a straightforward process. By following the steps outlined in this article, you can set up a legal and successful business. Remember to obtain an EIN, create a partnership agreement, register with the Secretary of State, and comply with all necessary licenses and permits. Good luck!
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