Form a General Partnership in Nebraska

A Nebraska general partnership (GP) consists of two or more owners who co-own a business together. There are a number of reasons you may be considering a partnership. We’ll go over who should consider a partnership and the steps needed to form a general partnership in Nebraska. 

Step 1: Determine if you should start a general partnership

A Nebraska general partnership can be the right choice for some business owners, but others may need a different type of entity. Let’s explore some of the pros and cons of a Nebraska general partnership to see if it’s the right choice for you.

Pros

You probably wouldn’t be reading this if you didn’t have at least a passing interest in forming a partnership in Nebraska. Some of the primary benefits of a Nebraska general partnership include:

• Nebraska general partnerships are easy to form. In most cases, all you need is an agreement to create the partnership. 
• General partnerships in Nebraska do not have the same strict maintenance requirements and costs you may have with an LLC or corporation.
• Taxes are simple with a Nebraska general partnership. The income of the partnership will pass directly to you and your partners for tax purposes. This means you won’t have to pay a separate corporate income tax as you would with a corporation.

Cons

A Nebraska general partnership isn’t the right choice for everyone. Some of the potential drawbacks of a general partnership in Nebraska are:

• Partners are jointly and severally liable for the partnership’s debts and liabilities. That means if your partner racks up a big debt in the name of the partnership, you could be held personally liable for the amount owed.
• It’s possible you could also be held liable for negligent acts or other wrongdoing committed by your partner. 
• Partnerships generally have stricter rules for transferring ownership.
• Partnerships typically afford fewer opportunities to raise capital than do corporations.

Nebraska general partnerships can be a great option for short-term business projects. For longer projects or businesses with a lot of liability exposure, a general partnership might not be the best option.

Step 2: Choose a Business Name

Because a general partnership is not a formal entity, the name of your partnership will just be the last names of the partners. For example, if Michelle Andrews, Mike Garcia, and Ellen Freeman create a partnership, the name would be something like Andrews, Garcia, and Freeman. If you want to create a separate name for your partner, you will need to register a DBA (doing business as). If you already have a name in mind, check to see if your business name is available.

Step 3: File a DBA Name (if needed)

To register a DBA for your Nebraska general partnership you will need to register the name with the Nebraska Secretary of State. After you register your DBA, you will need to publish the name publicly within 45 days, as required by Nebraska law. Names should be different from existing businesses in Nebraska, and you will want to avoid names that are misleading or suggest you are engaged in an illegal enterprise. You can find out more about registering a DBA in Nebraska on our information page here. 

Step 4: Draft and sign partnership agreement

A partnership agreement is one of the most vital parts of forming a partnership in Nebraska. A partnership agreement sets the rules and expectations of the partners. Having these rules laid out can help partners resolve disputes should they arise. Without a partnership agreement, the partners may have to rely on the Nebraska Uniform Partnership Act to solve conflicts, which may not bring the best outcome for the partners or the partnership.

Step 5: Obtain licenses, permits, clearances

General partnerships in Nebraska are subject to the same licensing and registration requirements as other Nebraska businesses. The State of Nebraska does not require a business license for all businesses, but it does require licenses for certain occupations. Some of the business licenses in Nebraska include:

• Liquor licenses
• Health & Human Services license
• Agricultural license

Nebraska also requires licenses for private detectives, collection agencies, and sports agents, among other licenses. You may need to check with your county and city to see if your business requires any types of local licenses. We can help take some of the stress out of the search with our Business License Report.

Step 6: Get an Employer Identification Number (EIN)

An EIN is an identification number issued by the federal government to businesses. An EIN will be required if you plan on opening a bank account for your business, hiring employees, or obtaining financing for the partnership. Fortunately, we can help you obtain an EIN.

Step 7: Get Nebraska State Tax Identification Numbers 

You may also need to register your business in Nebraska for tax purposes. Nebraska general partnerships may be subject to sales and use taxes in Nebraska. Corporations and LLCs may be required to pay business income tax. You can register your business with the Nebraska Department of Revenue.

Forming a Business Partnership in Nebraska: Next Steps

Once you have formed your Nebraska general partnership, there are a few other items you may want to consider. If you have obtained an EIN, you may want to set up a business banking account. For certain businesses with exposure to risk and liability, insurance could be a good idea. Some businesses will also want to consider outside financing for specific projects or goals. You will also want to keep up with your taxes.

How We Can Help

A general partnership is relatively easy to get up and running,  but it’s not for everyone. If you want a business entity that will help keep you from being held personally liable for your business’s debts and liabilities, an LLC or a corporation may be a good fit. We can help you form either of these entities. We also offer a wide range of additional tools and services, including our Worry-Free Compliance Service to help keep your business legal. Contact us today to learn more.

If you want to have more liability protection for your business than what is given by a general partnership, we offer services to help you form a Nebraska LLC or a Nebraska corporation. And take a look at our many other tools and services to see how we can help you start, maintain, and grow your business today.