How to Create a General Partnership in Florida: A Beginner’s Guide


Steve Goldstein
Steve Goldstein
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Create a General Partnership in Florida

Forming a general partnership in Florida can be a great way to combine your skills, resources, and ideas to create a thriving business. In Florida, also known as The Sunshine State, general partnerships are relatively easy to establish, making them an attractive option for entrepreneurs who want to keep things simple and cost-effective.

This article will guide you through the essential steps to start a general partnership in Florida. From understanding the legal requirements and drafting a partnership agreement to registering your partnership and obtaining necessary permits, we’ll provide you with the necessary tools and insights to help you launch your business venture. Whether you’re opening a boutique retail store or a cutting-edge tech startup, this comprehensive guide will help you navigate the process of starting a general partnership in Florida.

What is General Partnership In Florida

It is a business structure where two or more people come together to form a jointly owned business. In the general partnership business, the partners agree upon sharing assets, responsibilities, profits, and liabilities (legal & financial). In a general partnership, Partners consent to carry potentially unlimited liability personally. Liabilities are not restricted as they would be, for example, in a limited liability partnership (LLP) or a limited liability company (LLC) structure. Unlike the LLCs, a partner, in this case, can be legally sued for any business debts, and a possibility of seizure of personal assets can occur.

Before you start setting up your general partnership, it is advised that you consult a legal person. They will know what is best for you and your business. You can always form an LLC instead of a general partnership to protect your personal assets from business debts.

LLCBuddy Editorial Team

How to Create a General Partnership in Florida

To create a general partnership in Florida, you must follow the guidelines below: forming a business name, making a partnership agreement, requesting an EIN, getting a license and permit, getting a state-based tax ID, and opening a bank account.

Step 1: Choose a Business Name in Florida

Naming your business is one of the most crucial activities during the startup phase. Your general partnership name is the foundation for your brand in Florida 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.

If you want to set up an LLC, there is a complete guide on Florida LLC name guidelines for a proper business name. Here are some guidelines you must follow while naming your general partnership-

  • Name availability: The name should be available, and no other entity should have the same name in Florida.
  • Trademarks
  • Limit of restricted words that need a license in Florida

In Florida, if you register your general partnership business with the Florida Secretary of State, then the name you choose will be the company’s official name. On the contrary, unregistered general partnership businesses use the last name of all of their partners by default. For instance, if Selena Gomez and Hailey Beiber enter business together, the partnership name is “Gomez & Bieber” by default if unregistered. 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 “Doing Business As (DBA)” name with Florida SOS.

In Florida, 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 with the SOS 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 Florida. A partnership agreement is a legal contract that specifies how a for-profit company would operate when run by two or more people.

The partnership agreement specifies each partner’s roles within the company, their ownership stakes, and their share of profits and losses. 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:

  • Name of Partners
  • The principal address of the partnership
  • Purpose of the partnership
  • Terms of the partnership
  • Partnership start date and end date (if not for infinite time)
  • Partnership dissolution terms (for finite partnership)
  • Capital contribution of partners
  • Share of Interest of Partners
  • Profit distribution of partners (equal distribution by default, if not specifies any special condition)
  • Salary distribution (if applicable)
  • Partnership Management Terms
  • Terms of Partnership Sale

These key factors must be considered when forming or creating a partnership agreement in Florida. In this way, all business partners will understand what this is about and how to proceed if the mentioned scenarios happen in Florida.

Without a Partnership Agreement, your company will often be subject to the general partnership default laws of Florida. The default laws in Florida might not be appropriate for your requirements. Hence, it is important to have a transparent agreement while forming a partnership.

Step 3: Request an EIN in Florida

After documenting the partnership agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your general partnership. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website. Getting EIN is necessary whether you are opening an LLC in Florida, or a general partnership, or something else.

The application of an EIN in Florida can be through the following:

  • Apply Online- You can apply for EIN online, which is the most desirable and fastest method for users.
  • Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 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.

After you have your EIN number, you can benefit in several ways. It will provide your general partnership with the final advantage necessary to operate fully without encountering legal or judicial issues. For more details about EIN for your business, you may check why you need EIN.

Step 4: License and Permit for General Partnership in Florida

Before your general partnership business operates in Florida, you must have a business license first. A business license is a document issued by a government agency that permits you to operate your business in the geographic region that that agency governs.

To legally operate your partnership, you must apply for a business license to Florida Department of Business and Professional Regulation. In some states, you might need to obtain a Privilege License. Based on the business structure, you might need it. In Florida, partnership businesses do not need to get to obtain a privilege license. You might even need more than one license in Florida. Numerous general partnership licenses need to be filed and renewed regularly.

Step 5: Obtain Florida Tax ID Number

In Florida, to conduct a business, you must comply with the Florida Department of Revenue. If you have a general partnership in Florida, you must obtain the Florida Tax ID number from Florida Department of Revenue. Your partnership business must pay state taxes (if applicable).

Step 6: Open a Bank Account

Once you have filed and received your general partnership license, you should now open a bank account since you will use this account for yourself, your clients, and your employees.

Your business dealings in Florida might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN for creating a business bank account for firms other than sole proprietorships. Also, keeping separate finances helps you avoid combining personal and professional finances.

Example of General Partnership in Florida

Individuals looking to collaborate and numerous kinds of 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
  • Business Consulting

General partnerships are also formed by partners who are spouses or other family members who want to operate a business together.

Important Information

Maintaining Business License in Florida

Now that you have established your general partnership, you must maintain or renew your business license every now and then. Make time to check the status of your licenses at least once per year. Then, you can keep from missing anything significant. If there are any issues, you can address them.

Paying your Taxes in Florida

Even if you have established your general partnership in Florida, pay your taxes and keep everything up to date so you won’t pay any penalty. Florida tax information will help you with what to pay before or during the operation of your professional corporation. You must check with Florida Department of Revenue for more details.

Advantages of General Partnership in Florida

  • Foundation only requires two people: Forming a general partnership doesn’t need many people to operate. You can form a general partnership with a partner in mind and a business plan. It can be a group of friends or colleagues, a family member, or a spouse and wife partnership.
  • Equal Rights: Everyone is granted equal rights when a business is founded using a general partnership; each partner is free to express their ideas and choose what is best for the company’s success.
  • Management Option: One of the advantages of joining a general partnership is the opportunity to select the finest management options for the company. For this reason, large partnerships should draft an agreement describing each partner’s responsibilities inside the business. As a result, each partner’s leadership abilities are enhanced.
  • Flexibility: General Partnership is the basic form of a business structure since it can be converted into any business entity, such as LLC. If you have flexibility in applying for an LLC in Florida, you will have default rules set by law, and you need to have an operating agreement for this.
  • Pass-through taxation: The pass-through tax structure will make the general partnership business not pay twice the tax. Due to this structure, most start-ups and entrepreneurs in Florida apply for a GP or LLC. And one of the main advantages of a general partnership is that partners don’t have to pay for the losses collectively.

FAQs

What is a general partnership in Florida?
A general partnership in Florida is a business structure where two or more people share the profits, losses, and management of a business.
What are the advantages of forming a general partnership in Florida?
A general partnership in Florida allows for flexibility in sharing of profits, losses and management of the business. The partners also benefit from limited liability protection and the ability to combine resources and skills.
What are the disadvantages of forming a general partnership in Florida?
A general partnership in Florida can be expensive to set up. Also, all the partners are held personally liable for the debts and obligations of the partnership.
What are the requirements to form a general partnership in Florida?
To form a general partnership in Florida, the partners must fill out the Application for Certificate of Authority, which must include the name of the partnership and the names of the partners. The partnership must also file an initial report and pay necessary fees.
Are there any special requirements if the general partnership in Florida is owned by a married couple?
Yes, in the case of married couples, the partnership must register with the Department of State and the partners must employ the services of a lawyer to draw up the partnership agreement.
How does a general partnership in Florida pay taxes?
The general partnership in Florida pays taxes in the same way as any other business structure. The partners are taxed on their share of the partnership’s profits and losses, and the partnership itself is not responsible for paying taxes.
What is the minimum capital requirement for a general partnership in Florida?
There is no minimum capital requirement for a general partnership in Florida. However, the partners must agree on how the profits, losses and management of the business will be shared.
Can a general partnership in Florida issue stock?
No, a general partnership in Florida cannot issue stock.
What are the reporting requirements for a general partnership in Florida?
The general partnership in Florida must file an annual report with the Florida Department of State, as well as any required state and local taxes.
Can a general partnership in Florida be dissolved?
Yes, a general partnership in Florida can be dissolved at any time. The partnership must file a Certificate of Dissolution with the Florida Department of State.
Are there any other requirements for a general partnership in Florida?
Yes, the partnership must have an operating agreement setting forth the rights and responsibilities of the partners. The partnership must also file an initial report and pay necessary fees.
What is a General Partnership in Florida?
A general partnership in Florida is a business arrangement between two or more individuals who share all the profits, losses, and liabilities associated with the business.
How do you create a General Partnership in Florida?
To create a general partnership in Florida, two or more people must agree to form a business together. The individuals must then register the business with the Florida Department of State’s Division of Corporations, which will provide the business with a partnership certificate.
What legal documents are required to form a General Partnership in Florida?
To form a general partnership in Florida, you will need to file a partnership agreement with the Florida Department of State, Division of Corporations. This document should include the names of the partners, the contributions of each partner, their percentage of interests, and the nature of their business.
What are the tax implications of forming a General Partnership in Florida?
General partnerships in Florida are subject to federal income tax and state income tax. Partners will be required to file Form 1065, U.S. Return of Partnership Income, as well as pay estimated taxes during the year.
Are there any restrictions on who can form a General Partnership in Florida?
Yes, there are restrictions in Florida when it comes to forming a general partnership. One of the partners must be a resident of the state, and none of the partners can be minors or convicted felons.
What is the role of each partner in a General Partnership in Florida?
Each partner in a general partnership in Florida is responsible for taking part in the management and operations of the business. They are also responsible for their share of the profits, losses, and liabilities associated with the business.
What are the benefits of forming a General Partnership in Florida?
One of the main benefits of forming a general partnership in Florida is that it is easy to set up and manage. It also comes with limited liability protection for each partner, which may protect their personal assets in case of a lawsuit.
Are there any disadvantages of forming a General Partnership in Florida?
Yes, there are some disadvantages to forming a general partnership in Florida. For example, each partner is personally liable for the debts and liabilities of the business, which can put their personal assets at risk.
What should be included in a Partnership Agreement for a General Partnership in Florida?
A partnership agreement for a general partnership in Florida should include the name of the business, the names of the partners, the contributions of each partner, their percentage of interests, and the nature of the business. It should also include the rights and responsibilities of each partner, as well as any restrictions or prohibitions.
Is there an annual filing requirement for a General Partnership in Florida?
Yes, a general partnership in Florida is required to file an annual report with the Florida Department of State. The report is due by May 1 of each year and must include the current address of the general partnership and the name and address of the person responsible for filing the report.
What happens if a General Partnership in Florida fails to file its annual report?
If a general partnership in Florida fails to file its annual report, the business will be subject to fines and penalties, and the partnership may be dissolved.
Is a General Partnership in Florida required to obtain a business license?
Yes, a general partnership in Florida is required to obtain a business license from the county or municipality in which it is located. Each partner is also individually responsible for obtaining the appropriate professional licenses for their trade.
Is a General Partnership in Florida required to register with the state?
Yes, a general partnership in Florida is required to register with the state Department of State. The registration process will require the completion of the appropriate forms and payment of a filing fee.
Do partners in a General Partnership in Florida have to pay self-employment taxes?
Yes, partners in a general partnership in Florida are considered self-employed and must pay self-employment taxes on their share of the business’s income.
How do partners in a General Partnership in Florida pay their taxes?
Partners in a general partnership in Florida are responsible for filing their individual tax returns and paying their taxes on the income they receive from the partnership. The partnership is also responsible for filing Form 1065, U.S. Return of Partnership Income, and paying taxes on its income.
Is a General Partnership in Florida required to hold meetings?
Yes, a general partnership in Florida is required to hold meetings to discuss the management and operations of the business. The meetings must be held in accordance with the partnership agreement, and minutes of the meeting must be kept.
What happens if a partner in a General Partnership in Florida leaves or dies?
If a partner in a general partnership in Florida leaves or dies, the partnership must be dissolved or restructured, depending on the terms of the partnership agreement.
Can a General Partnership in Florida sue or be sued?
Yes, a general partnership in Florida can sue or be sued. Each partner is also responsible for their share of the business’s debts and liabilities.
Is a General Partnership in Florida required to keep records?
Yes, a general partnership in Florida is required to keep records of its business activities, including income, expenses, and assets.
Can a General Partnership in Florida enter into contracts?
Yes, a general partnership in Florida can enter into contracts with other parties. Each partner is liable for the obligations under the contract.
Can a General Partnership in Florida be dissolved?
Yes, a general partnership in Florida can be dissolved in accordance with the terms of the partnership agreement. The dissolution process must be completed with the Florida Department of State.

Also Read

Why Create General Partnership Florida is So Important

One of the main reasons why creating a general partnership in Florida is so important is the shared responsibility and liability that comes with this legal structure. In a general partnership, all partners share the profits, losses, and responsibilities of the business equally. This means that each partner has a vested interest in the success of the partnership and is motivated to work together towards achieving the mutual goals of the business. Additionally, by splitting the financial burden and risk among multiple individuals, general partnerships can help mitigate the impact of unforeseen circumstances or challenges that may arise in the course of running a business.

Another key advantage of creating a general partnership in Florida is the ability to leverage the diverse skill sets and resources of each partner. By bringing together individuals with different backgrounds, experiences, and expertise, general partnerships can access a wider range of knowledge and capabilities than a single individual or entity could on their own. This pooling of resources can result in more innovative ideas, strategic decision-making, and efficient problem-solving, ultimately leading to a more competitive and successful business.

Furthermore, general partnerships in Florida offer flexibility and autonomy to partners when it comes to decision-making and management. Unlike other business structures, such as corporations or limited liability companies, general partnerships do not require extensive corporate formalities or strict governance requirements. This freedom allows partners to adapt quickly to changing market conditions, make decisions collectively, and respond promptly to opportunities or challenges as they arise. Additionally, general partnerships give partners the flexibility to customize the terms of their partnership agreement according to their specific needs and preferences, further enhancing the autonomy and control they have over their business.

Creating a general partnership in Florida also fosters a sense of camaraderie and teamwork among partners, which can lead to stronger relationships and a more harmonious working environment. By collaborating closely with one another, partners can build trust, respect, and mutual understanding, laying the foundation for effective communication, cooperation, and coordination within the partnership. This unity and solidarity can not only improve the overall performance and productivity of the business but also create a more enjoyable and fulfilling experience for all partners involved.

In conclusion, the decision to create a general partnership in Florida is an essential step for any business looking to harness the collective power and potential of multiple individuals. By forming a general partnership, business owners can share responsibility and liability, leverage diverse skills and resources, enjoy flexibility and autonomy, and foster teamwork and camaraderie among partners. These advantages can propel the success and sustainability of a business and ensure that it thrives in a competitive marketplace.

Conclusion

In conclusion, starting a general partnership in Florida may effectively combine resources, expertise, and creativity to achieve your mutual business goals. By understanding the legal requirements, drafting a thorough partnership agreement, and registering your partnership, you’ll be well on your way to a successful collaboration. As you embark on this exciting journey, remember to maintain open communication and stay committed to the shared vision that inspired your partnership in the first place.

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