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

by
Create a General Partnership in Kansas

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

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

Steps in Creating a General Partnership in Kansas

What is General Partnership in Kansas?

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

It is recommended that you consult to Kansas 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 Kansas 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
  • Kansas 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 Kansas

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

Filing a DBA in Kansas has N/A, which costs around $0 (not required). There is N/A validity in renewing your DBA. 

In Kansas, 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 Kansas 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 Kansas. 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 Kansas. The default laws might not be appropriate for your requirements.

Step 3: Request an EIN in Kansas

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

In Kansas, 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 Kansas.

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

Pros and Cons of a General Partnership in Kansas

In forming a general partnership in Kansas, 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 Kansas

  • 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 Kansas

  • 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 Kansas

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 Kansas, the business license fee ranges from $50 – $300, and varies by jurisdiction and license type.

Pay Your Taxes in Kansas

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

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

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

FAQs

What is a general partnership in Kansas?
A general partnership in Kansas is a type of business where two or more individuals own and operate a business together.
What are the benefits of starting a general partnership in Kansas?
Starting a general partnership in Kansas provides owners with shared responsibilities and expenses, simplified tax filing, and easier decision-making.
What is required to start a general partnership in Kansas?
To start a general partnership in Kansas, you must file a partnership registration with the Kansas Secretary of State’s office and obtain any required business licenses.
How many people are needed to form a general partnership in Kansas?
Two or more people are required to form a general partnership in Kansas.
Is it necessary to have a written agreement to form a general partnership in Kansas?
It is not required by Kansas law to have a written partnership agreement. However, it is highly recommended.
What should be included in a written partnership agreement for a Kansas partnership?
A written partnership agreement should include shared responsibilities, terms of ownership and profits, decision-making agreements, and dissolution agreements.
Can a Kansas general partnership be owned by only out-of-state residents?
Yes, out-of-state residents can own a general partnership in Kansas.
What is the taxation structure for a general partnership in Kansas?
A general partnership in Kansas files an annual form K-120 as an information statement and does not pay state income taxes, only federal taxes.
What are the personal liabilities of the partners in a Kansas general partnership?
Each partner in a Kansas general partnership bears personal liability for the debts, obligations, and any wrongful acts of the business.
Can the partners of a Kansas general partnership share their personal expenses with the company?
Yes, personal expenses can be shared by the company, but the cost must be pertaining to the routine business operation.
Does the state of Kansas require a publication requirement before starting a general partnership?
No, the state of Kansas does not require publication requirements before starting a general partnership.
How to choose a name for a general partnership in Kansas?
The general partnership’s name in Kansas must include “partnership,” “co,” or “assoc.” and the names of one or more partners.
Can the partners of a Kansas general partnership share profits as they choose?
Yes, each partner in a Kansas general partnership shares in the profits according to their agreed percentage.
How does the Kansas Secretary of State’s Office calculate partnership fees?
The Kansas Secretary of State’s Office calculates partnership fees based on the number of partners, not the revenues of the partnership.
Can partners add or remove partners after starting the general partnership in Kansas?
Partners cannot remove other partners unless all parties agree to dissolve and reform the general partnership. New members can be added only with unanimous consent of current partners.
Can two general partnerships merge in Kansas?
Yes, two general partnership companies can merge in Kansas using a written agreement that details shared responsibilities and assets.
Is there an option to buy out a partner during a general partnership in Kansas?
Yes, under certain incidents of death, disability, or termination, a partner’s shares in the ownership of the partnership can be bought out similarly according to partnership agreement.
What are the records required to maintain a general partnership in Kansas?
The general partnership in Kansas must maintain appropriate financial records, tax returns, and partnership minutes.
Can a general partnership dissolved in Kansas owned between one person or less?
Termination in a Kansas general partnership may happen provided written notice is given and the dissolution satisfies existing partnership agreement under termination article.
Is there a residency requirement for general partnerships in Kansas?
No, there is no residency requirement for general partnerships in Kansas.
Can a general partnership legally conduct business outside of Kansas?
A general partnership is allowed to legally conduct business outside of Kansas, provided that state expenses where the company is conducting business are paid by the company.
Are there any rules related to business name conflict in Kansas?
Yes, any general partnership name similar to a legitimate and current business is restricted.
Can a change of ownership be easily dealt in Kansas?
No, it is hard to gain a change of ownership/personnel once the business started.
What are the management powers relegated among the partners?
According to the partnership agreement, management responsibilities can be dispersed among the partners.
Does a general partnership in Kansas require a Registered Agent by law?
Yes, a general partnership in Kansas requires a Registered Agent for the service of the trademark assignment.
Is there an annual report requirement for a general partnership in Kansas?
No, Kansas law does not require general partnerships to file an annual report.
Can anyone object to a general partnership starting business after registration in Kansas?
Yes, possibly someone can object to the registration of a new general partnership in Kansas by presenting an appeal.
How long does it take to process a general partnership paperwork in Kansas?
It can take up to approximately 3-5 business days to return certification of registration if filed online. If a paper filing and counter pickup were used, the processing time can approximately vary from next business day to 2-3 days.
What resources for additional assistance are available after filing of general partnership in Kansas?
The Kansas Secretary of State’s office does not provide legal advice for business formation, which necessitates business owners to contact an attorney to any extent needed.
What are the advantages of a general partnership in Kansas?
The advantages of a general partnership in Kansas include the shared control and responsibility among partners, the ability to combine skills, resources, and capital, and the pass-through taxation.
What is the process for creating a general partnership in Kansas?
To create a general partnership in Kansas, you need to file a Certificate of Formation with the Kansas Secretary of State and obtain all necessary licenses and permits.
Can anyone form a general partnership in Kansas?
Yes, any two or more people can form a general partnership in Kansas.
Is there a fee for registering a general partnership in Kansas?
Yes, there is a fee for registering a general partnership in Kansas. The fee varies depending on the type of business entity.
How is a general partnership taxed in Kansas?
A general partnership in Kansas is not subject to Kansas state income tax, but partners are responsible for paying income tax on their individual share of the partnership income.
What is required to register a general partnership in Kansas?
To register a general partnership in Kansas, you need to file a Certificate of Formation with the Kansas Secretary of State and provide the required information, such as the name of the partnership, the names and addresses of the partners, and the purpose of the partnership.
How long does it take to register a general partnership in Kansas?
The processing time for registering a general partnership in Kansas varies, but it can take up to a few weeks.
Can a general partnership in Kansas have employees?
Yes, a general partnership in Kansas can have employees.
How does liability work in a general partnership in Kansas?
In a general partnership in Kansas, each partner is personally liable for the actions and debts of the partnership.
What is a partnership agreement in Kansas?
A partnership agreement in Kansas is a legally binding contract that outlines the terms and conditions of a general partnership, including the roles, responsibilities, and financial arrangements of the partners.
Is a partnership agreement required in Kansas?
No, a partnership agreement is not required in Kansas, but it is strongly recommended.
How can a partnership agreement in Kansas be amended?
A partnership agreement in Kansas can be amended by agreement of all partners.
What is the difference between a general partnership and a limited partnership in Kansas?
In a general partnership in Kansas, all partners share control and liability, while in a limited partnership, there are one or more general partners who control the partnership and are personally liable and one or more limited partners who contribute to the partnership and are not personally liable beyond their contributions.
Can a general partnership in Kansas change to a limited partnership?
Yes, a general partnership in Kansas can change to a limited partnership by filing a Certificate of Limited Partnership with the Kansas Secretary of State.
What are the registration requirements for a foreign general partnership to do business in Kansas?
A foreign general partnership must obtain a Certificate of Authority to do business in Kansas and comply with all registration and filing requirements.
What is the annual report requirement for a general partnership in Kansas?
A general partnership in Kansas is not required to file an annual report.
What happens if a partner wants to leave a general partnership in Kansas?
If a partner wants to leave a general partnership in Kansas, the partnership agreement should specify the terms and conditions for the departure, including the division of assets and liabilities.
How can a general partnership be dissolved in Kansas?
A general partnership in Kansas can be dissolved by agreement of the partners or by the death, bankruptcy, or resignation of a partner.
What happens if a general partnership in Kansas is sued?
In a general partnership in Kansas, all partners are jointly and severally liable for any lawsuits against the partnership and may be required to pay damages and legal fees.
Can a general partnership in Kansas become a corporation?
Yes, a general partnership in Kansas can become a corporation by filing Articles of Incorporation with the Kansas Secretary of State.
What are the record-keeping requirements for a general partnership in Kansas?
A general partnership in Kansas is required to keep accurate records of all financial transactions, including income, expenses, and assets.
How often should a general partnership in Kansas hold meetings?
A general partnership in Kansas should hold meetings on a regular basis, as specified in the partnership agreement.
What is the difference between a partnership and a joint venture in Kansas?
A partnership in Kansas is a long-term business relationship involving two or more people, while a joint venture is a short-term business relationship typically formed for a specific project.
What is a foreign general partnership in Kansas?
A foreign general partnership in Kansas is a general partnership that is formed in a state other than Kansas.
Can a foreign general partnership do business in Kansas?
Yes, a foreign general partnership can do business in Kansas, but it must first obtain a Certificate of Authority from the Kansas Secretary of State.
How can a general partnership in Kansas raise capital?
A general partnership in Kansas can raise capital by attracting new partners, obtaining loans from financial institutions, and selling equity securities.
What is the difference between a general partnership and a sole proprietorship in Kansas?
In a general partnership in Kansas, there are two or more owners who share control and liability, while in a sole proprietorship, there is only one owner who controls the business and is personally liable for its actions and debts.
Is a general partnership in Kansas required to obtain a business license?
Depending on the nature of the business, a general partnership in Kansas may be required to obtain licenses or permits from federal, state, or local authorities.

Also Read

Conclusion

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

Leave a Comment