Here are the general steps you need to follow in order to form a partnership in compliance with applicable laws. Make sure to consult your state page for state-specific details.
1. Choose a business name for the partnership and check for availability.
- Please see our section on choosing and checking the availability of a name for your small business, as well as our section on the trademark law aspects of choosing a name.
2. Register the business name with local, state, and/or federal authorities.
- If you will be operating a partnership under a business name that is different from the partners' names, then you will need to register the name as a "fictitious" or "assumed" business name (sometimes also called a "trade name" or a "doing business as" filing). In most states, you do this at the local level by registering with the county clerk's office in the county where the business is located. In other states, you may have to register with the Secretary of State or another state agency in addition to registering at the local level. For more on the requirements of state law, see the State Law: Forming a Partnership section. Fees and procedures may vary from location to location, so you should contact your county clerk's office for specifics.
- Although you are not required to do so, you should consider registering your business name as a federal and/or state trademark. Please see the Trademark for Business Naming section for details.
3. Negotiate and execute a partnership agreement.
- This step is not legally required, but it is highly advisable that partners execute a formal agreement. Please see the Partnership Agreements section for details.
4. Obtain any required local licenses.
- As a business doing journalism, you are not required to obtain any federal or state licenses or permits relating to carrying on a particular trade. Most local or city governments, however, require every business to obtain a basic business license, sometimes called a tax registration certificate. You get this license from your city or county. The best way to get information about fees and procedures is to contact your county or city clerk's office or other local government authority. The local chamber of commerce and other small business owners might also be a good resource for information regarding local licenses and/or permits.
5. Determine what tax obligations the partnership has, and take care of any necessary registrations.
- Partnerships need to apply for an Employer Identification Number (EIN) from the IRS. There is no filing fee. You can apply for an EIN:
- by submitting the required information online at the IRS's website. The EIN is issued immediately once the application information is validated;
- by telephone at 1-800-829-4933 from 7:00 a.m. to 10:00 p.m. in your local time zone; or
- by mailing or faxing Form SS-4, Application for Employer Identification Number. Instructions for Form SS-4 are available on the IRS website.
- If your partnership has an employee or employees (other than the partners), you likely will need to obtain a state employer identification number or account for tax purposes. You will also have to report any new hires as you make them. See the state pages on forming a partnership for details on state requirements.
- You should be aware that, as the owner of a small business, you may be subject to additional federal, state and local taxes and informational filing requirements, such as self-employment taxes and employment withholdings and filings. Please see the Tax Obligations of Small Businesses section for details.
- Although a partnership generally does not pay federal income tax at the entity level, it must file an information return, Form 1065, annually with the IRS. This return shows the partnership's income, deductions, and other required information, and must include the names and addresses of each partner, and each partner's distributive share of taxable income. For more information on the federal tax obligations of partnerships, see the IRS's page, Tax Information for Partnerships (includes links to forms and other resources).
6. Open a bank account for your business.
- It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. You will probably need a Tax ID number (EIN) and either a copy of the partnership agreement or your "fictitious" business name filing indicating the partners' names. Here is one example of the documentation banks ask for.