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

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
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Create a General Partnership in Georgia

If you would like to create a general partnership in Georgia, 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 Georgia 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 Georgia.

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

What is General Partnership in Georgia?

A general partnership in Georgia 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 Georgia Corporations or limited liability partnerships.

It is recommended that you consult to Georgia 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 Georgia rather than a general partnership.

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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
  • Georgia 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 Georgia

To create a general partnership in Georgia, 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 Georgia. 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 Georgia 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 Georgia with Georgia Secretary of State.

Filing a DBA in Georgia has two methods, by mail and in person, which costs around $172. There is Indefinite validity in renewing your DBA. 

In Georgia, 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 30 days. You must file a name reservation application in the Georgia Secretary of State 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 Georgia. 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 Georgia. The default laws might not be appropriate for your requirements.

Step 3: Request an EIN in Georgia

After completing the partnership agreement, you should get or seek an Employer Identification Number (EIN) in Georgia. 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 Georgia 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 Georgia 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 Georgia. Numerous general partnership licenses need to be filed and renewed regularly.

In Georgia, 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 Georgia.

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 Georgia 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 Georgia, check out the Best Bank for Georgia Small Business.

Pros and Cons of a General Partnership in Georgia

In forming a general partnership in Georgia, 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 Georgia

  • 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 Georgia

  • 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 Georgia

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 Georgia, the business license fee ranges from $50 – $300, and it is renew annually, by December 31st.

Pay Your Taxes in Georgia

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

Georgia taxes information will help you with what to pay before or during the operation of your professional corporation. You can check out the Georgia 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 Georgia?

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

FAQs

What is a general partnership in Georgia?
A general partnership in Georgia is a business structure in which two or more people agree to share ownership, profits, and losses of a business.
How do I form a general partnership in Georgia?
To form a general partnership in Georgia, you need to file a partnership agreement with the Georgia Secretary of State.
What is a partnership agreement?
A partnership agreement is a legal document that outlines the terms of your partnership, including how profits and losses will be shared and how any disputes will be resolved.
Can a general partnership in Georgia have only one owner?
No, a general partnership in Georgia requires at least two owners.
Is there a fee to file a partnership agreement in Georgia?
Yes, there is a fee to file a partnership agreement in Georgia. The fee varies based on the type of entity being formed.
How do I choose a name for my general partnership in Georgia?
The name of your general partnership in Georgia must be distinguishable from other business names on file with the Georgia Secretary of State.
How do I check if my chosen name is available in Georgia?
You can perform a search on the Georgia Secretary of State’s website to determine if your chosen name is available.
Do I need to register my partnership with the county or city in Georgia?
No, you only need to file your partnership agreement with the Georgia Secretary of State.
Is a partnership required to obtain a business license in Georgia?
In most cases, yes – partnerships engaged in business in Georgia must obtain a state and/or local business license.
Do general partners in Georgia have limited liability?
No, general partners in Georgia are personally liable for the partnership’s debts and obligations.
What is a limited partnership in Georgia?
A limited partnership in Georgia is a partnership that consists of at least one general partner (who assumes personal liability) and one or more limited partners (who do not assume personal liability).
Why might someone choose to form a limited partnership in Georgia?
Some reasons to form a limited partnership in Georgia might include limited liability protection for the limited partners, or to bring in investors who do not want to take on personal liability.
How is a limited partnership formed in Georgia?
To form a limited partnership in Georgia, you need to file a certificate of limited partnership with the Georgia Secretary of State.
What is a domestic partnership in Georgia?
A domestic partnership in Georgia is a type of partnership that allows people who are not married to get certain legal rights and benefits that are typically reserved for married couples.
Does Georgia recognize same-sex domestic partnerships?
Yes, Georgia recognizes same-sex domestic partnerships.
Do domestic partners in Georgia have legal rights to inheritance or medical decisions?
Domestic partners in Georgia have some legal rights, but these are limited compared to the legal rights of married couples.
Can domestic partners in Georgia file joint tax returns?
No, domestic partners in Georgia cannot file joint tax returns.
Can I have a general partnership in Georgia with partners who don’t live in the state?
Yes, you can form a general partnership in Georgia with partners who don’t live in the state.
What is a foreign partnership in Georgia?
A foreign partnership in Georgia is a business that was formed outside of Georgia but is conducting business within the state.
As a foreign partnership, do I need to register with the state of Georgia?
Yes, foreign partnerships engaged in business in Georgia generally must register with the Georgia Secretary of State.
What is a franchise partnership in Georgia?
A franchise partnership in Georgia is a business that is part of a larger company or brand.
How do I form a franchise partnership in Georgia?
You can form a franchise partnership in Georgia by finding a franchise opportunity and following the franchise’s processes and requirements.
How do I dissolve a general partnership in Georgia?
To dissolve a general partnership in Georgia, you need to file a statement of dissolution with the Georgia Secretary of State.
What is a statement of dissolution?
A statement of dissolution is a legal document that is filed to officially end the existence of a partnership.
Can one partner dissolve a general partnership in Georgia without the consent of the other partners?
No, partners must generally agree to dissolve a partnership.
What is a power of attorney in Georgia?
A power of attorney in Georgia is a legal document that gives someone the authority to make decisions on your behalf.
Can I use a power of attorney to make decisions for my partnership in Georgia?
No, a power of attorney is generally not sufficient to give someone the authority to make decisions on behalf of a Partnership.
Do I need a lawyer to form a general partnership in Georgia?
No, Georgia law does not require you to hire a lawyer to form a general partnership.
Should I hire a lawyer to form a general partnership in Georgia?
It may be a good idea to consult with a lawyer when forming a general partnership in Georgia to make sure you understand the legal implications and responsibilities of your partnership.
What are the advantages of forming a general partnership in Georgia?
Some advantages of forming a general partnership in Georgia include shared responsibility and resources, lower startup costs, and tax advantages.
What are the disadvantages of forming a general partnership in Georgia?
One disadvantage of forming a general partnership in Georgia is that partners share the risks and profits equally, regardless of input, which can lead to conflict.
How many people can form a general partnership in Georgia?
Two or more people can form a general partnership in Georgia.
Do I need to register my general partnership in Georgia?
While registration of a general partnership in Georgia is not required, it is recommended to avoid legal issues and ensure that your business is properly documented.
How do I register my general partnership in Georgia?
To register a general partnership in Georgia, you must file the business entity registration form with the Georgia Secretary of State.
Is a business license required for a general partnership in Georgia?
While a business license is not required for a general partnership in Georgia, some cities and counties may require one.
What types of taxes do general partnerships in Georgia need to pay?
General partnerships in Georgia are not taxed on the state level, but they are subject to federal taxes on their profits.
Can a general partnership be taxed like an LLC in Georgia?
No, a general partnership is taxed differently than an LLC in Georgia.
Can a general partnership in Georgia have employees?
Yes, a general partnership in Georgia can have employees.
Does Georgia law require a written partnership agreement for general partnerships?
No, Georgia law does not require a written partnership agreement for general partnerships, but it is strongly recommended to avoid disagreements and legal issues.
Can a general partnership in Georgia have a different name than the partners’ names?
Yes, a general partnership in Georgia can operate under a trade name or business name.
Is it possible for a general partnership in Georgia to become an LLC?
Yes, a general partnership in Georgia can convert into an LLC if all partners agree and file the proper paperwork with the state.
What is the liability of partners in a general partnership in Georgia?
Partners in a general partnership in Georgia have unlimited liability, which means that they are personally responsible for all debts and legal issues.
Can a partner sell their ownership in a general partnership in Georgia?
Yes, a partner in a general partnership in Georgia can sell their ownership share to another party.
What happens if a partner dies in a general partnership in Georgia?
In a general partnership in Georgia, if a partner dies, their share of ownership passes to their estate or heirs.
Can a general partnership in Georgia sue or be sued in court?
Yes, a general partnership in Georgia can both sue and be sued in court.
What happens if a partner leaves a general partnership in Georgia?
If a partner leaves a general partnership in Georgia, their ownership share will be determined by the partnership agreement or Georgia state law.
Can a general partnership in Georgia acquire debt or loans?
Yes, a general partnership in Georgia can acquire debt or loans in the name of the partnership.
Are general partnerships in Georgia required to maintain any records or bookkeeping?
Yes, general partnerships in Georgia are required to maintain thorough financial records and bookkeeping.
Can a general partnership in Georgia be formed for a specific purpose or project?
Yes, a general partnership in Georgia can be formed for a particular purpose or project.
Do partners in a general partnership in Georgia have to contribute equally?
No, partners in a general partnership in Georgia can contribute unequal amounts and proportions as determined by the partnership agreement.
Are partners in a general partnership in Georgia considered employees?
No, partners in a general partnership in Georgia are not considered employees.
Can a member of an LLP be a member of a general partnership in Georgia?
Yes, a member of an LLP can also be a member of a general partnership in Georgia.
Can a general partnership in Georgia be structured to allow for limited partners?
Yes, a general partnership in Georgia can be structured to include limited partners who have limited or no management control.
Can a general partnership in Georgia have a non-resident partner?
Yes, a general partnership in Georgia can have a non-resident partner.
Are partners in a general partnership in Georgia personally responsible for all business debts?
Yes, partners in a general partnership in Georgia are personally responsible for all business debts and liabilities.

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Conclusion

A general partnership can be viable for individuals looking to establish a business in Georgia 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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