Jim M. and Kevin S. currently operate businesses as sole proprietors. They decide to join together and form a partnership. In order to start the business with ease, they are electing not to form a corporation or limited liability company until operations are underway. After preparing their business plan and securing capital, they wondered how to form a Minnesota partnership and reconsider whether they should start as a corporation or limited liability company in lieu of a partnership. Did they have to file documents with the state? Were they required to fill out forms and apply for licenses or permits? Jim and Kevin researched the answers to these, and other, questions.
Choosing a Name
In Minnesota, general partnerships must file a Certificate of Assumed Name if the company’s name does not include the full names of all partners. Limited partnerships also may be required to file also, if they operate under any name other than their actual legal name.
If Jim and Kevin open a business called “Jim M. and Kevin S. Pizza Shop,” they will not need to file an assumed name certificate. However, if they form a business called the Red Wing Pizza Shop, they will.
A general partnership is a business owned by two or more people, who:
- Each share in the business management, and
- Each shoulder responsibility for the company’s debts and obligations.
It’s important that the business start out with an agreement. They should also consider the advantages of forming an entity to create asset protection. The early days of a business may be the best time to negotiate important matters like management, each partner’s contribution to the partnership, distributions to partners, and adding new partners.
Jim and Kevin met with their attorneys and drafted a solid partnership agreement.
Registrations and Licenses
Not every business is required to obtain permits, registrations, and licenses. However, it’s important to find out if this step is necessary for your business.
Because Jim and Kevin are starting a pizza shop, they knew they would need a number of permits and licenses. They talked to their attorneys and checked with local, state and federal government agencies. Jim and Kevin also obtained their tax ID numbers and unemployment insurance employer account numbers long before their grand opening.
Get Your Partnership Started the Right Way.
Let the attorneys at Virtus Law put their years of business experience to work for you. For assistance with your business concerns, call Virtus Law at 612.888.1000 or send us an email at firstname.lastname@example.org. Our main office is in Minneapolis, with other offices located in Maplewood, Cambridge, Edina, Mendota Heights, and Red Wing.