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


Steve Bennett
Steve Bennett
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Create a General Partnership in Oregon

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

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

What is General Partnership in Oregon?

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

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

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

Filing a DBA in Oregon has three methods, online, by mail, and in person filing., which costs around $50. There is two years validity in renewing your DBA. 

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

Step 3: Request an EIN in Oregon

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

In Oregon, 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 Oregon.

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

Pros and Cons of a General Partnership in Oregon

In forming a general partnership in Oregon, 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 Oregon

  • 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 Oregon

  • 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 Oregon

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

Pay Your Taxes in Oregon

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

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

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

FAQs

What is a general partnership in Oregon?
A general partnership in Oregon is a type of business entity in which two or more people carry on a business together.
What is required to create a general partnership in Oregon?
To create a general partnership in Oregon, you must file a Business Registry Application with the Oregon Secretary of State’s office.
How much does it cost to create a general partnership in Oregon?
The filing fee to create a general partnership in Oregon is $50.
Do I need to provide personal information when forming a general partnership in Oregon?
Yes, you will need to provide personal information, such as your name and address, when forming a general partnership in Oregon.
Who can form a general partnership in Oregon?
Anyone can form a general partnership in Oregon, provided they meet the state’s requirements for filing and registering the business.
Can a non-resident of Oregon form a general partnership in the state?
Yes, a non-resident of Oregon can form a general partnership in the state, as long as they meet the state’s requirements for doing so.
Is there a limit to the number of partners a general partnership can have in Oregon?
No, there is no limit to the number of partners a general partnership can have in Oregon.
What are the tax requirements for a general partnership in Oregon?
A general partnership in Oregon must file an annual tax return reporting the partnership’s income and deductions.
Are there any special permits or licenses required to operate a general partnership in Oregon?
The state of Oregon does not require special permits or licenses to operate a general partnership, but you may need to obtain permits or licenses from local municipalities.
Does a general partnership in Oregon have legal protection from personal liability?
No, a general partnership in Oregon does not have legal protection from personal liability.
Are there other types of partnerships in Oregon besides general partnerships?
Yes, there are also limited partnerships and limited liability partnerships in Oregon.
Can an existing business in Oregon convert to a general partnership?
Yes, an existing business in Oregon can convert to a general partnership by following the state’s requirements for filing and registering.
Do general partnerships in Oregon have to file annual reports?
Yes, general partnerships in Oregon must file an annual report with the Secretary of State’s office.
Can general partnerships in Oregon have partners who are corporations or LLCs?
Yes, general partnerships in Oregon can have partners who are corporations or LLCs.
What is a partnership agreement?
A partnership agreement is a legal document that outlines the rights, roles, and responsibilities of each partner in the partnership.
Is a partnership agreement required to form a general partnership in Oregon?
No, a partnership agreement is not required to form a general partnership in Oregon, but it is highly recommended.
How do I dissolve a general partnership in Oregon?
To dissolve a general partnership in Oregon, you must file a Statement of Dissolution with the Secretary of State’s office.
Can an existing general partnership in Oregon change its name?
Yes, an existing general partnership in Oregon can change its name by filing an Amendment with the Secretary of State’s office.
What happens if one partner wants to withdraw from the partnership?
If one partner wants to withdraw from the partnership, the partners must resolve the separation in accordance with the partnership agreement or state law.
Can a general partnership in Oregon be sued?
Yes, a general partnership in Oregon can be sued.
Are partnerships in Oregon subject to state or federal taxes?
Partnerships in Oregon are subject to state taxes, but not federal taxes.
What happens to the assets of a general partnership in Oregon if it is dissolved?
When a general partnership in Oregon is dissolved, the assets are distributed among the partners in accordance with the partnership agreement or state law.
Can two general partnerships in Oregon merge?
Yes, two general partnerships in Oregon can merge by following the state’s requirements for filing and registering the merger.
How much protection from personal liability do limited partnerships have in Oregon?
In limited partnerships in Oregon, general partners are subject to personal liability while limited partners have limited or no personal liability.
What are the differences between a general partnership and a limited partnership in Oregon?
In a general partnership in Oregon, all partners are subject to personal liability, while in a limited partnership, only the general partners are subject to personal liability.
Can spouses form a general partnership in Oregon?
Yes, spouses can form a general partnership in Oregon.
Can minors be partners in a general partnership in Oregon?
Minors in Oregon can be partners in a general partnership, as long as they are legally able to enter contracts.
Can a general partnership in Oregon deduct business expenses from income taxes?
Yes, a general partnership in Oregon can deduct business expenses from income taxes.
How long does it usually take to form a general partnership in Oregon?
It usually takes just a few business days to form a general partnership in Oregon, once the state has received the Business Registry Application and fee.
What are the requirements for creating a general partnership in Oregon?
To create a general partnership in Oregon, you need to file a Certificate of Partnership with the Secretary of State’s office and register for a tax ID number with the Oregon Department of Revenue.
Do all partners have to be residents of Oregon?
No, all partners don’t have to be residents of Oregon to create a general partnership in Oregon.
Can foreign entities create a general partnership in Oregon?
Yes, foreign entities can create a general partnership in Oregon, but they need to appoint an Oregon-licensed registered agent to accept any legal documents.
Do general partnerships in Oregon need to obtain a business license?
Yes, general partnerships in Oregon need to obtain a business license from the city where the business is located.
What’s the liability of each partner in a general partnership in Oregon?
Each partner in a general partnership in Oregon has unlimited liability for the debts and obligations of the business.
How are profits and losses distributed in a general partnership in Oregon?
Profits and losses are typically distributed equally among each partner unless otherwise specified in the partnership agreement.
What happens if a partner leaves a general partnership in Oregon?
If a partner leaves a general partnership in Oregon, the partnership typically dissolves, and the remaining partners have to create a new partnership or incorporate the business under a different structure.
Can a general partnership in Oregon have employees?
Yes, general partnerships in Oregon can have employees, and each partner will be responsible for withholding taxes and contributing to social security and medicare.
Is it possible to convert a general partnership in Oregon to a different entity structure?
Yes, you can convert a general partnership in Oregon to a different entity structure, like a limited liability company (LLC) or a corporation.
Do general partnerships in Oregon need to file an annual report?
No, general partnerships in Oregon don’t need to file an annual report, but they do need to renew their business license every year.
Are general partnerships in Oregon subject to a franchise tax?
No, general partnerships in Oregon aren’t subject to a franchise tax, but they are subject to other taxes such as income tax and self-employment tax.
When does a newly created general partnership in Oregon start its existence?
A newly created general partnership in Oregon starts its existence when the Certificate of Partnership is filed with the Secretary of State’s office.
Can a general partnership own property in Oregon?
Yes, a general partnership in Oregon can own property under its name, but the partners own the property jointly.
Is it possible to add new partners to a general partnership in Oregon?
Yes, it’s possible to add new partners to a general partnership in Oregon, but the existing partners need to execute a written agreement and file an amendment with the Secretary of State’s office.
Do general partnerships in Oregon need to keep financial records?
Yes, general partnerships in Oregon need to keep financial records and may need to undergo an annual audit depending on their size.
How can general partnerships in Oregon be dissolved?
General partnerships in Oregon can be dissolved by either explicit decision of the partners or after the completion of a partnership’s defined term.
In case of a lawsuit, is each partner held liable for a general partnership in Oregon?
In case of a lawsuit against a general partnership in Oregon, each partner can be held personally liable for the damages or judgment.
How long does it take to create a general partnership in Oregon?
It typically takes a few business days to process a general partnership’s Certificate of Partnership with the Secretary of State’s office in Oregon.
Can individuals who are not partners run the day-to-day operations of a general partnership in Oregon?
Yes, individuals who aren’t partners can run the day-to-day operations of a general partnership in Oregon, but the ultimate decision-making power remains with the partners.
Can one partner dissolve a general partnership in Oregon without the consent of the other partner?
No, one partner can’t dissolve a general partnership in Oregon without consent from the other partners.
What happens to the assets of a general partnership when it gets dissolved?
When a general partnership in Oregon dissolves, the remaining assets are distributed equally among the partners.
Can a partner be an entity instead of an individual in a general partnership in Oregon?
Yes, a partner can be an entity like a corporation or an LLC in a general partnership in Oregon.
Is it possible for a general partnership in Oregon to continue after the death of one of the partners?
Yes, a general partnership in Oregon may continue after the death of one of the partners, depending on the terms laid out in the partnership agreement.
Can a general partnership in Oregon have a different trade name from the name of the partners?
Yes, a general partnership in Oregon can operate under a trade name, and the trade name must be registered with the Secretary of State’s office.
Are general partnerships in Oregon required to have a written partnership agreement?
No, a written partnership agreement is not legally required in Oregon, but it’s a recommended practice for setting out the priorities and responsibilities of each partner.
Can a creditor of a partner of a general partnership in Oregon seize partnership assets?
Yes, a creditor of a partner in a general partnership in Oregon can try to seize that partner’s share of partnership assets.
Are general partnerships in Oregon required to carry insurance?
No, general partnerships in Oregon are not required by law to carry insurance, but it’s essential to protect the partners from potential legal liabilities

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Conclusion

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