How to Create a General Partnership in Florida | A Complete Guide

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Create a General Partnership in Florida

If you would like to create a general partnership in Florida, there are a few guidelines that you should understand. A general partnership is one of the things that a businessman considers since it comprises two or more entities to carry on a trade or business. Each partner contributes money, property, labor, or special skills, and each partner shares in the profits and losses from the business. You can start an LLC in Florida for your general partnership to personally carry potentially unlimited liability.

Knowing about the general partnerships will benefit you and several partners, making you form your business properly. If you want to know more about the general partnership, follow our steps to Create a General Partnership in Florida.

Webinarcare Editorial Team will help you create with thorough research and market study. Before starting a general partnership in Florida, you must be guided by all the factors we have gathered in this article.

Steps in Creating a General Partnership in Florida

What is General Partnership in Florida?

A general partnership in Florida is a business structure where two or more individuals come together to establish a business and agree to share the profits, losses, and management responsibilities. Each partner contributes skills, resources, and capital to the business and makes decisions collaboratively. In a general partnership, partners have unlimited personal liability for the debts and obligations of the business, meaning their personal assets can be used to cover any debts or liabilities incurred by the partnership. This type of business structure is relatively simple to form and offers flexibility in decision-making and management but lacks the legal protection of limited liability offered by other structures like Florida Corporations or limited liability partnerships.

It is recommended that you consult to Florida Business Attorney before beginning the process of forming your general partnership. They will understand what is best for you and your company. To shield your personal assets from corporate debts, you can always Start an LLC in Florida rather than a general partnership.

– WEBINARCARE EDITORIAL TEAM

Example of a General Partnership

An example of a general partnership could be a small marketing agency created by two friends, Shane and Jane. Shane has a background in graphic design, while Jane has experience in digital marketing strategies. They decide to join forces and create a marketing agency that offers clients a combination of their expertise.

Shane and Jane contribute their skills, resources, and capital to start the business. They agree to share the profits, losses, and management responsibilities. Both partners actively participate in the agency’s day-to-day operations, making decisions and working with clients collaboratively.

In this general partnership, Shane and Jane have unlimited personal liability for any debts or obligations incurred by their marketing agency. If the agency faced financial difficulties, both partners’ personal assets could be used to cover the debts. However, the simplicity and flexibility of the general partnership structure allow them to manage and grow their business together easily.

Individuals looking to collaborate and numerous service providers have chosen general partnerships as their preferred business entity. That’s frequently because of its simple design, low price, and simplicity of setup. Some general partnership examples include: 

  • Providing Professional Services (architectural firms, medical clinics, etc.)
  • Selling goods at retail 
  • Opening a restaurant
  • Florida Business Consulting

General partnerships are also formed by partners who are spouses or other family members who want to operate a business together.

Steps in Creating a General Partnership in Florida

To create a general partnership in Florida, you must follow the guidelines below: choosing a business name, making a partnership agreement, requesting an EIN, getting a license and permit, and opening a bank account. 

Step 1: Choose a Business Name

Naming your business is one of the most important activities during the startup phase, especially if you will form an LLC in Florida. Your general partnership name serves as the foundation for your brand and is what clients use to connect you to the products or services you offer. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity without being hampered by irrelevant factors. 

For example, let’s assume the general partnership focuses on providing eco-friendly landscaping solutions. A potential name for this partnership could be “GreenScape Innovations.” This name highlights the business’s core values (eco-friendly) while also showcasing the industry (landscaping) and the innovative approach the partners aim to bring to the market.

For your to come up with this business name idea, here are some guidelines to consider when choosing a name for a general partnership:

  • Reflect on the Nature of the Business: Choose a name representing your products or services, and communicate your business’s essence to your target audience.
  • Keep it Simple and Memorable: A short, easy-to-pronounce name will be easier for customers to remember and share with others.
  • Make it Unique: Research the names of other businesses in your industry to ensure your chosen name stands out and does not infringe on any existing trademarks or copyrights.
  • Consider the Partners’ Names: Some general partnerships incorporate the partners’ names in the business name (e.g., Smith & Johnson Consulting). However, this approach may only be suitable for some businesses, especially if the names are difficult to pronounce or remember.
  • Test the Name: Share the potential name with friends, family, and potential clients to gather feedback and ensure it resonates with your target audience.
  • Check for Domain Availability: Research the availability of your chosen name as a domain name for your website and on social media platforms to ensure a consistent online presence.
  • Avoid Limiting your Business Scope: Choose a flexible name to accommodate future product or service changes. Avoid using specific locations, product names, or niche markets in the name if you plan to expand or diversify later.
  • Comply with Legal Requirements: Ensure the chosen name complies with any legal requirements or restrictions in your jurisdiction, such as avoiding misleading or offensive terms.
  • Consider Professional Input: Consult with Florida Business Attorney or trademark specialist to ensure your chosen name is legally sound and can be registered as a trademark if necessary.

By following these guidelines, you can choose a name for your general partnership that is memorable, unique, and effectively communicates your business’s essence.

In addition, most general partnership businesses use the last name of all of their partners.  For instance, if Jennie Kim and Lalisa Manoban enter business together, the partnership name is “Kim & Manoban” by default. However, if you would like to form a business name under something more appropriate, such as “EJI Design and Build,” then you’ll need to File a DBA in Florida with Florida Department of Business and Professional Regulation.

Filing a DBA in Florida has three methods, online, by mail, and in person filing., which costs around $50 Processing Fee, $10 Certificate of Status, $30 Certified Copy. There is five years validity in renewing your DBA. 

In Florida, if you do not wish to file your general partnership business right away but want to hold the name that you have decided on, then you can reserve your business name for 120 days. You must file a name reservation application in the Florida Department of Business and Professional Regulation to keep the name. 

Step 2: Make a Partnership Agreement

After you have chosen a business name for your general partnership, the next step would be making a partnership agreement in Florida. A partnership agreement is a crucial document that outlines the terms and conditions governing a partnership. It helps to establish a clear understanding of each partner’s roles, responsibilities, and expectations and prevents disputes and misunderstandings.

Additionally, it discusses business management guidelines and potential contingencies that may arise, such as a partner’s passing or a partner’s decision to leave the partnership.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Florida. The default laws might not be appropriate for your requirements.

Step 3: Request an EIN in Florida

After completing the partnership agreement, you should get or seek an Employer Identification Number (EIN) in Florida. An EIN will serve as your general partnership’s tax identification number. The Internal Revenue Service can provide you with an EIN. (IRS). It is a nine-digit number comparable to your Social Security number. EIN, on the other hand, is distinct from SSN. It is exclusively used for business-related operations, such as filing general taxes. The form must be filled out and sent to the IRS website. Obtaining an EIN cost between $30 and $280. 

The application of an EIN in Florida can be through the following:

  • Apply Online- The Online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4PDF application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

You can benefit in various ways once you obtain your EIN number. It will give your general partnership the final advantage to operate at its full potential without legal or court problems.

Step 4: Get a License and a Permit

You must have Florida Business License before your general partnership business operates. A business license is a document granted by a government agency that allows you to operate your business in the territory governed by that agency.

To legally operate your partnership, you’ll need a business license. You may need more than one license in Florida. Numerous general partnership licenses need to be filed and renewed regularly.

In Florida, the business license fee costs about $50 – $300.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Florida.

Step 5: Open a Bank Account

After filing and receiving your general partnership license, you should open a bank account for yourself, your clients, and your employees.

A US bank account may make your business dealings in Florida easier because it increases your company’s authenticity and profitability. Most banks require an EIN for firms other than sole proprietorships to open a business account. Keeping separate finances also prevents you from combining personal and professional finances.

If you would like to open a bank account in Florida, check out the Best Bank for Florida Small Business.

Pros and Cons of a General Partnership in Florida

In forming a general partnership in Florida, there are pros and cons that you may experience. I will list the pros and cons for you to understand why and how a general partnership is crucial. 

Pros of Forming a General Partnership in Florida

  • Easy and Inexpensive to Form: General partnerships are relatively simple to establish, requiring minimal paperwork and registration costs compared to other business structures like corporations or limited liability companies.
  • Decision-Making: Partners can pool their skills, knowledge, and resources, leading to more efficient and effective decision-making and business operations.
  • Flexibility: General partnerships offer flexibility in management structure, profit distribution, and decision-making processes, allowing partners to customize their business relationships to best suit their needs.
  • Tax Benefits: In most jurisdictions, general partnerships are not taxed as separate entities. Instead, profits and losses are passed through to the partners, who report them on their income tax returns. This avoids the issue of double taxation that affects corporations.
  • Greater Access to Capital: With multiple partners, a general partnership may have increased access to capital and resources compared to a sole proprietorship.

Cons of Forming a General Partnership in Florida

  • Unlimited Personal Liability: In a general partnership, all partners have unlimited personal liability for the debts and obligations of the business. This means that each partner’s personal assets can be used to cover any debts incurred by the partnership, which can be a significant risk.
  • Potential for Conflicts: As partners share management and decision-making responsibilities, disagreements or conflicts can arise, negatively impacting the business’s operations and success.
  • Limited Lifespan: A general partnership’s existence is often tied to the lives of its partners. The partnership may be dissolved if a partner withdraws, becomes incapacitated, or dies, potentially leading to instability and uncertainty.
  • Difficulty in Raising Capital: While general partnerships may have more access to capital than sole proprietorships, they may still need help raising funds compared to corporations or limited liability companies, as investors may be more hesitant to invest in a business with unlimited personal liability.
  • Lack of Legal Distinction: Unlike corporations or limited liability companies, general partnerships do not have a separate legal identity from their partners, limiting the partnership’s ability to enter into contracts or own property in its name.

When considering a general partnership, weighing the pros and cons and assessing whether this business structure aligns with your goals, risk tolerance, and desired level of management involvement is essential.

Maintain Business License in Florida

You must maintain or renew your business license regularly now that you have established your general partnership. Make time at least once a year to check the status of your licenses. Then you will get everything important. You can deal with any problems that arise. In Florida, the business license fee ranges from $50 – $300, and varies by jurisdiction and license type.

Pay Your Taxes in Florida

Even if you have established your general partnership in Florida, pay your taxes and keep everything up to date so you won’t pay any penalty. 

Florida taxes information will help you with what to pay before or during the operation of your professional corporation. You can check out the Florida Small Business Taxes to further understand why you must pay your taxes on time. 

Can I Convert My General Partnership Into Another Business Entity in Florida?

By following the appropriate state procedures, you can convert your general partnership into another business entity, such as Florida Corporation converting to an LLC; or Sole Proprietorship to Florida LLC. This may involve filing conversion documents with the Florida Secretary of State’s office and paying any required fees.

FAQs

What is a general partnership in Florida?
A general partnership is a business entity in Florida where two or more individuals or entities agree to carry on a business together for profit.
Is a written partnership agreement required in Florida?
No, a written partnership agreement isn’t required in Florida, but it’s strongly recommended. Partnership agreements can help prevent future disputes and provide clarity on the responsibilities and operations of the partnership.
How do I register my Florida general partnership with the state?
Unlike some states, Florida doesn’t require general partnerships to register with the state. However, if your partnership will be operating under a fictitious name, you’ll need to file a fictitious name registration with the state.
How are Florida general partnerships taxed?
Florida general partnerships are pass-through entities, meaning the profits and losses of the partnership flow through to the partners’ personal tax returns. The partnership itself doesn’t pay income tax.
What are the liability risks of operating a general partnership in Florida?
In a general partnership, partners have unlimited liability, meaning they are each personally responsible for the partnership’s debts and obligations.
Can someone who isn’t a resident of Florida be a partner in a Florida general partnership?
Yes, there are no residency requirements for partners in a Florida general partnership.
How can I ensure that my Florida general partnership is in compliance with state laws?
Consulting with an attorney can help ensure your partnership is compliant with Florida laws and regulations.
Are there any specific naming requirements for Florida general partnerships?
Florida general partnerships must use the last names of one or more of the general partners in the partnership name, unless they register a fictitious name.
Can a general partnership in Florida own property?
Yes, a general partnership in Florida can own and manage property just like any other business entity.
How do I dissolve a Florida general partnership?
Partnerships can be dissolved by mutual agreement of the partners or by court order. Partners should consult with an attorney to ensure compliance with Florida laws and regulations.
Is a general partnership in Florida required to have a registered agent?
There’s no requirement for a general partnership in Florida to have a registered agent.
Can a limited liability company (LLC) be a partner in a Florida general partnership?
Yes, an LLC can be a partner in a Florida general partnership.
Can a Florida general partnership choose to be taxed as an S-corporation?
No, a Florida general partnership is not eligible to be taxed as an S-corporation.
How do I change the partnership agreement in a Florida general partnership?
Any changes to the partnership agreement must be unanimous among the partners, unless the partnership agreement specifies different requirements.
Can a partner in a Florida general partnership transfer their ownership interest?
Yes, but partners must first consult the partnership agreement to determine any transfer restrictions.
Do I need a business license to operate a general partnership in Florida?
In many cases, yes. Business license requirements vary by location, so you’ll need to check with the city or county where the partnership will operate.
Does the state of Florida require partnerships to file annual reports?
No, Florida does not require general partnerships to file annual reports.
Do I have to file for a partnership with the Florida Secretary of State?
No, Florida does not require partnership filings with the Secretary of State.
Can a partnership in Florida have more than two partners?
Yes, a partnership in Florida may have more than two partners.
Can a partnership in Florida be formed for a nonprofit purpose?
Yes, Florida partnerships may be formed for either profit or nonprofit purposes.
Can a Florida general partnership do business under a different name than its registered name?
Yes, partnerships can conduct business in Florida using a registered fictitious name.
Can a partner in a Florida general partnership be held liable for the acts of another partner?
Yes, in a general partnership, partners are jointly and severally liable for the actions of the partnership and the actions of individual partners.
Does a partner in a Florida general partnership need to make a monetary contribution to the partnership?
No, monetary contributions are not always required in a Florida general partnership.
Is there a fee to file a fictitious name registration in Florida?
Yes, a fee is required to file a fictitious name registration with the state of Florida.
What are the fines and penalties for noncompliance with Florida partnership laws?
Fines and penalties for noncompliance with Florida partnership laws vary based on the violation. Consult with an attorney to better understand potential consequences.
Can a Florida general partnership register for a state tax id number (EIN)?
Yes, partnerships in Florida can register for a state tax id number (EIN) through the Florida Department of Revenue.
What happens to partnership assets in the event of partner death in Florida?
Partnership agreement language may direct how assets will be distributed in the event of partner death, but typical Florida law would allow the surviving partnership past the 90 days to demand payment to the decedent’s estate.
Can a general partner in a Florida general partnership also be a limited partner?
No, a partner cannot have two different types of partnerships in the same partnership.
Can a Florida general partnership have a silent partner?
Yes, Florida general partnerships can have silent partners, as long as they are clearly defined in the partnership agreement.
What are the requirements for creating a general partnership in Florida?
The requirements for creating a general partnership in Florida are minimal. All partners must be at least 18 years old, mentally competent, and able to enter into a contract.
Do I need to file any paperwork to create a general partnership in Florida?
No, you do not need to file any paperwork with the state of Florida to create a general partnership.
Do I need a written partnership agreement in Florida?
While it is not legally required, it is highly recommended to have a written partnership agreement in place to establish each partner’s rights and obligations.
Can my general partnership have any name in Florida?
Yes, you can choose any name for your general partnership in Florida, as long as it is not already being used by another business in the state.
How do I register my general partnership’s name in Florida?
You can register your general partnership’s name with the Florida Division of Corporations.
What taxes does a general partnership in Florida need to pay?
A general partnership in Florida does not pay taxes at the entity level. Instead, each partner is responsible for paying taxes on their share of the partnership’s income.
How do I obtain a federal tax ID number for my general partnership in Florida?
You can obtain a federal tax ID number by applying online with the Internal Revenue Service.
Are there any restrictions on who can be a partner in a general partnership in Florida?
No, there are no restrictions on who can be a partner in a general partnership in Florida.
What happens if a partner leaves the general partnership in Florida?
If a partner leaves, they are entitled to their share of the partnership’s assets. The partnership will continue to exist unless all partners choose to dissolve it.
How can I dissolve a general partnership in Florida?
A general partnership in Florida can be dissolved by mutual agreement of all partners or by a court order.
Are partners in a general partnership in Florida personally responsible for the partnership’s debts?
Yes, partners in a general partnership in Florida are personally responsible for the partnership’s debts.
Can a partner be held personally liable for another partner’s actions in a general partnership in Florida?
Yes, in a general partnership in Florida, each partner can be held personally liable for the actions of the other partners.
Can a minor be a partner in a general partnership in Florida?
No, a minor cannot be a partner in a general partnership in Florida because they are not legally able to enter into a contract.
Do I need to have a physical business location to create a general partnership in Florida?
No, you do not need to have a physical business location to create a general partnership in Florida.
Can the partnership agreement in Florida specify that a partner is an employee of the partnership?
Yes, the partnership agreement in Florida can specify that a partner is an employee of the partnership.
Can a general partnership in Florida do business in other states?
Yes, a general partnership in Florida can do business in other states, but it must register with those states if certain thresholds are met.
How are profits and losses divided among partners in a general partnership in Florida?
Profits and losses are divided among partners in a general partnership in Florida based on the percentage of ownership each partner has.
Who can manage a general partnership in Florida?
Each partner has an equal say in managing the partnership, unless the partnership agreement specifies otherwise.
Does a general partnership in Florida have perpetual existence?
No, a general partnership in Florida typically ends upon the death or bankruptcy of a partner or by mutual agreement of the partners.
Can a general partnership in Florida raise capital through the sale of stock?
No, a general partnership in Florida cannot raise capital through the sale of stock because it is not a corporation.
Can a general partnership in Florida have only one partner?
No, a general partnership in Florida must have at least two partners.
Can a corporation be a partner in a general partnership in Florida?
Yes, a corporation can be a partner in a general partnership in Florida, but it needs to have at least one human being as a partner.
Can a foreign entity be a partner in a general partnership in Florida?
Yes, a foreign entity can be a partner in a general partnership in Florida.
What happens to the partnership when a partner dies in Florida?
When a partner dies, their share of the partnership passes to their estate.
Can a partner have multiple roles in a general partnership in Florida?
Yes, a partner can have multiple roles in a general partnership in Florida such as being a partner as well as employee.
Do partners in a general partnership in Florida need to be citizens or permanent residents of the U.S.?
No, partners in a general partnership in Florida do not need to be citizens or permanent residents of the U.S..
Are partners in a general partnership in Florida entitled to receive a salary or other compensation?
Partners in a general partnership in Florida are not entitled to receive a salary but can agree to do so in the partnership agreement.

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Conclusion

A general partnership can be viable for individuals looking to establish a business in Florida with shared decision-making, management responsibilities, and profits. This type of business structure is relatively simple to establish and offers flexibility in operations. However, it is essential for potential partners to carefully consider the unlimited personal liability aspect of general partnerships, which means that each partner’s personal assets could be at risk to cover any debts or obligations incurred by the business. Before forming a general partnership, the partners should have a clear and well-drafted partnership agreement that outlines the roles, responsibilities, profit-sharing, and dispute-resolution mechanisms to ensure a smooth working relationship and minimize potential conflicts. Partners should also explore other business structures, like limited liability partnerships or corporations, to determine the best fit for their needs and goals.

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