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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 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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