Partnership Formation To-Do and Information Check List

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Partnership Formation To-Do and Information Check List Powered By Docstoc
					This document provides an information to-do and information check list for partnership
formation. The document includes information that the founders of a new partnership
will likely need to know regarding the next steps in starting their business and complying
with legal formalities. The document provides useful information about selecting a
partnership name, preparing a statement of partnership authority, registering a business
name, preparing a partnership agreement, obtaining an EIN, opening a partnership
bank account, hiring employees and independent contractors, obtaining trademark
protection, and obtaining permits and licenses. This form should be used by businesses
and individuals interested in forming a business partnership.
      PARTNERSHIP FORMATION TO-DO AND INFORMATION CHECK LIST

 Name Availability. Choose the Name of your Partnership and make sure it is available.
You should do research to see if the name is available by checking to see if any corporations or
LLCs in your state have your proposed name. This can be accomplished by visiting the website
of the Secretary of State (“SOS”) and using the business entity name search. In addition you
should research whether any partnerships have your name in your county or in any surrounding
counties. This can be accomplished by visiting each county’s County Clerk website and using
the Fictitious Business Name search – in some counties this can also be called an Assumed
Name, Doing Business As or D/B/A search. Additionally, you should try searching the internet
for your proposed name. If you have done the foregoing searches and all looks good, and you
plan to eventually obtain trademarks or service marks in your company name, you should also
check to make sure the trademark and/or service mark is available with the United States Patent
and Trademark Office (“USPTO”). A basic Trademark search can be done on the USPTO’s
website; however this search is fairly complicated and might not be conclusive. You might
consider talking to an attorney about performing this search for you. State trademark and/or
service mark searches should also be considered. You will also want to consider checking to see
if the domain name associated with your chosen business name is available, as well as
performing a search of local phone books and directories to see if any local businesses are
currently operating with the same or a similar name that did not appear in your other search
results.

        o Why? If the name is taken, you will confuse your customers, and potentially have
legal issues with the other entity using the same name. In addition, if the Partnership name is not
available with your County Clerk, your paperwork will be denied and you will have wasted your
time with the paperwork and filing fee. If the trademark is not available, if and when you
eventually apply for a trademark, your application will be rejected and you will have wasted your
time with the paperwork and the filing fee (which exceeds $300). The same is true of your
business’ potential domain name – you do not want to invest in forming an LLC and registering
a trademark only to find that the valuable online domain name presence your business needs is
unavailable. A local search of business names will help to assure that you are aware of any
businesses operating with the same or a similar name that have not taken the additional steps and
filed the name with the Secretary of State or registered its trademark. Just because another
business has not registered its trademark does not mean that it does not have legal rights to that
name. Questions as to the legal rights to a business name should be addressed to a legal
professional.

       o One-time or repetitive? These availability searches are a one-time task for each
potential name.

       o Due Date? You should do this before you attempt to form your Partnership.

       o State Specific? The procedures for searching the state SOS database and the state
trademark/service mark database may differ from state to state.

       o What Triggers? You have decided you would like to form a Partnership.
 Statement of Partnership Authority. Prepare and execute your Partnership’s Statement of
Partnership Authority (“Statement”), and file the Statement with the SOS’s office, paying the
filing fee and requesting an extra certified copy.

        o Why? The Statement is your Partnership’s documentation with your state, while this
is not necessary to be filed to exist as a partnership, it may be required for the Partnership to
consummate real estate deals or other transactions. You must pay the filing fee for your State to
process the paperwork. The reason you request an extra certified copy is so you will have an
original copy for your files.

       o One-time or repetitive? Preparing and filing the Statement is a one-time task.

       o Due Date? You should prepare the Statement when you start the Partnership.

        o State Specific? Each state has its own rules and regulations regarding what must be
included on the Statement, some states don’t even call it a Statement. If you would like a
detailed and attorney reviewed sample Statement, a sample specific to your state can be
purchased on docstoc.com, otherwise forms can often be found on the website of the Secretary of
State of your state (for example, in California: http://www.sos.ca.gov/business/gp/forms/gp-1.pdf
can be used). The filing costs and other fees are also state specific.

       o What Triggers? You have decided you would like to form a Partnership.

 Register Your Fictitious Business Name. You must file a Fictitious Business Name
Statement with your County Clerk, unless you are doing business using your surname. These
can also be called an Assumed Name filing or Doing Business As or D/B/A filing. These filing
forms can often be found at the County Clerk’s website for your county, for example, in Los
Angeles            County         the           form          is        located           at:
http://www.lavote.net/GENERAL/PDFS/FICTITIOUS_BUSINESS_NAME.pdf. In addition,
most counties require publication of the fictitious business name in a newspaper or other
publication.

       o Why? It is required to register the partnership.

       o One-time or repetitive? Generally this is a one-time task.

        o Due Date? You should register prior to doing business under the assumed name. The
actual due date will vary county by county, for example in Los Angeles county; you must file no
later than 40 days after the business start date.

       o State Specific? As indicated above, this is county specific; each county will have its
own requirements, filing fees and forms.

       o What Triggers? Starting a partnership.
 Partnership Agreement. Prepare and have the partners execute a Partnership Agreement. If
you would like a detailed and attorney reviewed sample Partnership Agreement, a sample
specific to your state can be purchased on docstoc.com.

         o Why? The Partnership Agreement is the most important document for a Partnership,
it sets forth how the Partnership is governed; the number of Partners; the rights and duties of the
Partners; how new Partners are admitted; how profits and losses are split; dissolution rights;
termination issues; and many other issues. While Partnership Agreements are not mandatory, in
absence of a Partnership Agreement, your states default partnership rules will apply, which likely
will not handle the issues the way you and your partners would prefer.

      o One-time or repetitive? The Partnership Agreement is drafted once, but can be
amended over time if issues arise. New partners will need to sign the Partnership Agreement as
well.

       o Due Date? The Partnership Agreement should be drafted and executed as soon as
possible following formation of the Partnership.

       o State Specific?      Some states have law limiting what can be agreed to in the
Partnership Agreement.

       o What Triggers? Forming a Partnership.

 Employer Identification Number. Prepare, execute and submit to the IRS Form SS-4
(Application for Employer I.D. Number), this can be done on paper, printable at:
http://www.irs.gov/pub/irs-pdf/fss4.pdf,  or     can   be applied for   online  at:
https://sa1.www4.irs.gov/modiein/individual/index.jsp.

        o Why? The Employer Identification Number (“EIN”) is the Partnership’s Social
Security Number (Social Security Numbers can only be issued to people; EINs are issued to
Partnerships). This number is necessary to open a bank account for the Partnership and also for
tax reasons. Some of the questions on the EIN application have tax implications, so it may be
necessary to consult an attorney or tax professional.

       o One-time or repetitive? Obtaining an EIN is a one-time task.

       o Due Date?       You should apply for an EIN promptly following formation of the
Partnership.

        o State Specific? EIN is issued by the Federal government and ac
				
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Description: This document provides an information to-do and information check list for partnership formation. The document includes information that the founders of a new partnership will likely need to know regarding the next steps in starting their business and complying with legal formalities. The document provides useful information about selecting a partnership name, preparing a statement of partnership authority, registering a business name, preparing a partnership agreement, obtaining an EIN, opening a partnership bank account, hiring employees and independent contractors, obtaining trademark protection, and obtaining permits and licenses. This form should be used by businesses and individuals interested in forming a business partnership.
This document is also part of a package Essential Documents to Start a Business 86 Documents Included