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

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

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

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

What is General Partnership in Nevada?

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

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

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

Filing a DBA in Nevada has two methods, by mail and in person., which costs around Varies by county. There is five years validity in renewing your DBA. 

In Nevada, 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 90 days. You must file a name reservation application in the Nevada 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 Nevada. 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 Nevada. The default laws might not be appropriate for your requirements.

Step 3: Request an EIN in Nevada

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

In Nevada, 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 Nevada.

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

Pros and Cons of a General Partnership in Nevada

In forming a general partnership in Nevada, 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 Nevada

  • 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 Nevada

  • 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 Nevada

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

Pay Your Taxes in Nevada

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

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

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

FAQs

What is a general partnership in Nevada?
A general partnership is a type of business entity where two or more people operate a business together and share the risk, profits, and losses in Nevada.
Who can form a general partnership in Nevada?
Any two or more people can form a general partnership in Nevada.
How do I form a general partnership in Nevada?
To form a general partnership in Nevada, you must file a Certificate of Limited Partnership with the Nevada Secretary of State.
What information is required to file a Certificate of Limited Partnership in Nevada?
You will need to provide the name of the general partnership, the names and addresses of the partners, and the name and address of the registered agent in Nevada.
Do I need a registered agent for my general partnership in Nevada?
Yes, you must designate a registered agent in Nevada who can receive legal papers and other official notices on behalf of your general partnership.
How much does it cost to file a Certificate of Limited Partnership in Nevada?
It costs $75 to file a Certificate of Limited Partnership in Nevada.
How long does it take to process a Certificate of Limited Partnership in Nevada?
It takes approximately 1-3 business days to process a Certificate of Limited Partnership in Nevada.
Do I need to file a separate tax return for my general partnership in Nevada?
No, general partnerships are not taxed as separate entities in Nevada. Instead, profits and losses are passed through to the individual partners, who report them on their personal tax returns.
Do I need a partnership agreement for my general partnership in Nevada?
While not required by law, it is highly recommended that you have a partnership agreement in place to clearly define the rights and responsibilities of each partner in Nevada.
Can I change the partnership agreement at a later date in Nevada?
Yes, you can amend the partnership agreement at any time in Nevada, as long as all partners agree.
What are the advantages of forming a general partnership in Nevada?
Advantages of forming a general partnership in Nevada include shared financial and legal responsibility, shared decision-making, and lower start-up costs.
What are the disadvantages of forming a general partnership in Nevada?
Disadvantages of forming a general partnership in Nevada include personal liability for the actions of your partners, possible conflicts between partners, and shared profits and losses.
Can a general partnership in Nevada own property?
Yes, a general partnership in Nevada can own property under the partnership name.
Can I form a general partnership with someone who lives in another state?
Yes, you can form a general partnership in Nevada with someone who lives in another state.
Do I need a business license to operate a general partnership in Nevada?
Yes, you will need to obtain a business license to operate a general partnership in Nevada.
Do general partnerships in Nevada have fiduciary duties?
Yes, partners in Nevada general partnerships have a fiduciary duty to act with care and undivided loyalty to the partnership.
Can I have a silent partner in a general partnership in Nevada?
Yes, you can have a silent partner in a general partnership in Nevada, though their rights and responsibilities must be defined in the partnership agreement.
Can an LLC be a partner in a Nevada general partnership?
Yes, an LLC can be a partner in a Nevada general partnership.
Can a corporation be a partner in a Nevada general partnership?
Yes, a corporation can be a partner in a Nevada general partnership.
Can I be held personally liable for the debts of the partnership in Nevada?
Yes, partners in a Nevada general partnership can be held personally liable for the debts of the partnership.
Can I open a business bank account for my general partnership in Nevada?
Yes, you can open a business bank account for your general partnership in Nevada.
How are profits and losses divided in a general partnership in Nevada?
Profits and losses in a Nevada general partnership are divided based on the percentage of ownership or the partnership agreement.
What happens to the partnership if one partner dies or leaves the partnership in Nevada?
The Nevada general partnership is dissolved if one partner dies or withdraws, unless the partnership agreement provides for the continuation of the partnership.
What is the name of the Nevada law governing general partnerships?
The law governing general partnerships in Nevada is the Nevada Revised Statutes Chapter 87.
Can a general partnership in Nevada be dissolved voluntarily?
Yes, a Nevada general partnership can be dissolved voluntarily by the partners with the unanimous consent of all partners.
Can a general partnership in Nevada be dissolved involuntarily?
Yes, a Nevada general partnership can be dissolved involuntarily by court order or by operation of law.
Can I transfer my partnership interest to someone else in Nevada?
Yes, you can transfer your partnership interest to someone else in Nevada, subject to any terms and restrictions in the partnership agreement.
What is the duration of a general partnership in Nevada?
There is no specific duration for a general partnership in Nevada, unless the partnership agreement says otherwise.
Can a partner be removed from a general partnership in Nevada?
Yes, a partner can be removed from a Nevada general partnership by court order or by operation of the partnership agreement.
What is a general partnership?
A general partnership is a type of business relationship where two or more individuals carry on a business together and share profits and losses.
What are the requirements to create a general partnership in Nevada?
The requirements to create a general partnership in Nevada are minimal. You need two or more people who share in the management, profits, and liabilities of the company.
How do I file a partnership agreement in Nevada?
Unlike some other states, Nevada does not require you to file a formal agreement to create a partnership. However, it is wise to have a partnership agreement in place to set forth the terms of your business relationship, including each partner’s contribution, profit-sharing, and loss allocation.
Is there a fee to form a general partnership in Nevada?
There is no registration fee required to form a general partnership in Nevada.
What is the liability of a partner in a general partnership?
In a general partnership, each partner is personally liable for the business’s debts and obligations.
Can a partnership have limited partners in Nevada?
Yes, Nevada does allow for limited partners in a general partnership. However, if a partner contributes a defined amount of capital, he or she will be classified as a limited partner and will have limited liability for the business debts and obligations.
Can a partner be liable for another partner’s debts in Nevada?
Yes, in a general partnership, each partner is jointly and severally liable for the partnership’s debts and obligations.
What is a dissociation agreement in a Nevada general partnership?
A dissociation agreement in a Nevada general partnership is a written agreement between partners that outlines the terms of separation between one of the partners from the partnership.
How do I withdraw from a Nevada partnership?
To withdraw from a Nevada partnership, you must notify your partners in writing. Also, having a partnership agreement will help guide the terms of separation.
Can one person be a general partner in a Nevada general partnership?
No, to form a partnership, you need multiple people. A single person cannot form a general partnership in Nevada.
Are general partnerships required to file taxes in Nevada?
No, a general partnership is considered a pass-through entity in Nevada, meaning the partnership itself doesn’t pay taxes on its income. Instead, each partner pays taxes on their individual share of the partnership income on their personal income tax return.
How do I file taxes for my Nevada partnership?
Each partner in a Nevada partnership must report their share of the profit or loss on their individual income tax return.
What is a “doing business as” name and how do I obtain one for my Nevada partnership?
A “doing business as” (DBA) name is an alternative name for a business. To obtain a DBA name for your Nevada partnership, you must register with the appropriate state or local government office.
What is a fictitious firm name application in relation to a Nevada partnership?
A fictitious firm name application in Nevada is used if the partnership wants to operate under a different name than its full legal name.
Are partnerships required to register with the Nevada Secretary of State?
No, there is no requirement to register your Nevada general partnership with the Secretary of State.
What is a registered agent and do I need one for my Nevada partnership?
A registered agent is a person or entity designated to receive legal documents on behalf of a business. In Nevada, a partnership must have a registered agent.
Can a foreign partnership do business in Nevada?
Yes, a foreign partnership can do business in Nevada, but it must register with the Nevada Secretary of State.
What is a certificate of good standing and do I need one for my Nevada partnership?
A certificate of good standing is an official document issued by the Nevada Secretary of State showing that your partnership is current with its state filings. You may need a certificate of good standing when applying for business licenses or permits.
What is a Nevada partnerships’ legal name?
The legal name of a Nevada partnership is the name of the partnership unless they register a fictitious name.
What is a foreign LLC and how does it differ from a Nevada domestic LLC?
A foreign Limited Liability Company (LLC) is an LLC formed in a state other than Nevada. Domestic LLCs are fashioned in Nevada.
How is the ownership interest represented in a partnership?
Ownership interest in a partnership is in the form of “partnership units.”
What is the “right of survivorship” in Nevada partnerships?
Nevada partnerships don’t have right of survivorship. Following the death of a partner, their interest terminates automatically.
What is the difference between a general partnership and a limited partnership in Nevada?
In a limited partnership, one or more partners have limit their liability, but in a general partnership all partners take full liability of the company’s debts.
Can partners in a Nevada partnership share profits and losses differently?
Yes, partners in a Nevada partnership can agree to share profits and losses on a different basis than ownership percentages.
What happens if one partner in a Nevada partnership dies?
The partnership will end or dissolve in the event of death unless the surviving partners agree to continue.
Can a partner sell their interest in a Nevada partnership?
Yes, a partner can sell their interest in a Nevada partnership with consent of the other partners agreeing.
What is a buy-sell agreement in a Nevada partnership?
A buy-sell agreement is an agreement among partners of a Nevada partnership designated for certain events, such as death, disabling injury, conflicts between partners. It sets forth how to proceed with such circumstances, specifically in regard to ownership of business interests.
Can a Nevada partnership add new partners after its initial formation?
Yes, partners can be added to a Nevada general partnership with the consent of the partners.

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Conclusion

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