Partnerships are a common business type because they are relatively simple to set up and allow for flexibility in management structure. A general partnership is an agreement between two or more people to go into business together for profit. The partners remain personally liable for the debts and obligations of the business. Virginia partnerships are governed by state partnership law and by contractual agreements between the parties.
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The state of Virginia does not require partnerships to file any paperwork to form the business. Instead, a partnership is automatically formed as soon as two or more individuals begin doing business together. Virginia allows, but does not require, general partnerships to file a Statement of Partnership Authority with the State Corporation Commission. The optional filing can be used by partnerships to establish a public record of existence of the enterprise. However, general partnerships may choose to not file anything with the state. The statement must include the name and address of the partnership, names and addresses of the partners, and agent responsible for accepting legal documents on behalf of the business.
Many partnerships draft a partnership agreement to govern the affairs of the business. Although not a requirement, a partnership agreement will provide the rights and responsibilities of each of the partners to avoid conflict down the line. When a partnership agreement is not in place, the affairs of the partnership are instead governed by the default provisions in Virginia partnership law. For example, unless otherwise specified in a partnership agreement, each partner is entitled to an equal share of the partnership's profits.
Fictitious Name Registration
If you want to operate the partnership under a different name than the partners, you must register a fictitious name with the Office of the Clerk of the Circuit Court in the county where your partnership is located. The name must be registered before you may transact business. General partnerships are not required to file fictitious names with the state.
Depending on the type of business, a general partnership may obtain county or city licenses or permits to operate business on a local level. If the type of business is regulated by the state, it may also need a statewide professional or occupational license. Examples of state regulated professions include social work, accounting, medicine and trucking. Visit the Virginia Department of Business Assistance website to determine if your profession is regulated.
If your general partnership has employees or you plan on collecting sales tax, you must register with the Virginia Department of Taxation. You may complete the tax registration online on the Department's website to obtain a Virginia Employment Commission account number.