How to Set Up a Partnership in Virginia

By Elizabeth Rayne

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.

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.

Partnership Formation

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.

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Partnership Agreement

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.

Licensing

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.

Tax Registration

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.

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Importance of Partnership Agreement

A legal partnership is formed automatically whenever two or more parties -- either individuals or organizations -- agree to do business together and share profits and losses. Partnerships are governed by state law, and these laws vary somewhat from state to state. You don't need to register your partnership with the state government for partnership law to apply.

How to Withdraw From a Partnership in Virginia

Virginia defines a partnership as an association of two or more people with an intent to carry on a business for profit as co-owners. Partners are permitted to withdraw from a partnership under Virginia law for any reason, at any time. The terms of the partnership agreement may specify that the partnership will dissolve automatically upon the withdrawal of one partner.

How to Set Up a Partnership in Tennessee

Like many other states, Tennessee does not require partnerships to officially register as a partnership. The agreement of two or more people to go into business together is sufficient to form a partnership, although having a written agreement in place is recommended. In Pennsylvania, the partnership may be required to file registration for a fictitious name. Under Tennessee state law, a general partnership has the option to voluntarily submit a Statement of Partnership authority with the Department of State, which must be filed by at least two partners. This statement describes which partners have the power to act on behalf of the partnership and gives other businesses greater confidence in the partnership.

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