Here is an outline of the steps you need to follow in order to form a partnership in Virginia. You should also read the general section on forming a partnership for information applicable in any state.
1. Choose a business name for your 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 your partnership under a name that is different from your name and that of your partners, then you will need to register the name with the Office of the Clerk of the Circuit Court in the county where your business is located.
- 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. Draft and sign a partnership agreement.
- Although not legally required, it is strongly suggested that you and your partners sign a partnership agreement laying out the rights and responsibilities of the partners. For details, please see the Partnership Agreements section.
4. Obtain any required local licenses.
- Please see the general section on forming a partnership for details.
5. Determine what tax and other regulatory obligations your partnership has, and take care of any necessary registrations.
- Request an Employer Identification Number (EIN) from the IRS. This can be done via its online application. There is no filing fee.
- If you have an employee or employees in Virginia (other than yourself and your partners), you need to apply for a VEC (Virginia Employment Commission) account number. You can do this via the Online Services for Businesses website, which can also register you for other business taxes (if applicable).
- Whenever you hire an employee in Virginia, you must inform both the IRS and the State of Virginia. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information at the Virginia New Hire Reporting website.
- If you have three or more employees in Virginia, you need to carry workers' compensation insurance. The Virginia Workers' Compensation Commission administers the program.
- As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
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 a business name filing indicating the partners' names. (Here is one example of the documentation banks ask for.)