Form a General Partnership in Wisconsin

Forming a Wisconsin general partnership is a fast and easy way to get your business started.

Of course, you and your partner will want to confirm that the general partnership business model fits your needs. Learn more and follow our step-by-step guide to creating a partnership in Wisconsin.

Step 1: Determine if you should start a general partnership

You’ll need to think through whether a Wisconsin general partnership is the right entity type for your specific type of business. Whether a general partnership is right for you often depends upon your appetite for personal liability, your budget for business compliance, or both.

We’ve put together some pros and cons of forming a partnership in Wisconsin. Unfortunately, it can’t definitively answer the question of what business structure is right for you. But looking at the pros and cons may help you decide what entity type is right for your business partnership in Wisconsin. 

Pros

A general partnership can be a great business entity option for many entrepreneurs because:

• A general partnership is easy and cost-effective to form
• General partnerships require little maintenance
• General partnership compliance is relatively inexpensive
• The distribution of losses and profits is typically straightforward
• General partnerships enjoy pass-through taxation 

A short-term business goal like building a single shopping center is a great candidate for the general partnership structure. However, if your goal is to someday sell your partnership or pass your partnership interest down to your kids, a Wisconsin general partnership may not be for you. General partnerships have different restrictions on transferability than LLCs, corporations, and even other types of partnerships. 

Wisconsin general partnerships are typically designed to dissolve when one partner leaves the business or passes away. It can be difficult and expensive to create a general partnership that’s easily transferrable, and other business entities may be more suitable to meet those goals.

Cons

Depending on the type of business you want to run, a business partnership in Wisconsin can complicate your goals rather than help you achieve them. Some potential drawbacks of running a Wisconsin general partnership include: 

• Lack of personal asset protection, unlike an LLC or corporation
• Partners can be held jointly and severally liable for the partnership’s liabilities
• Potentially stricter rules for transferring business ownership to a new partner
• Few, if any, options for raising capital compared to corporations and other types of business entities

If you’re still undecided, a trusted business adviser can give you additional insight on whether forming a partnership in Wisconsin is right for you. 

Step 2: Choose a business name

While you don’t need to register as a general partnership in Wisconsin, you may need to reserve or register your business’s “trade name.” An assumed name is any name for the business other than the partners’ first names, last names, or a combination thereof. If you decide you want to use a different name for your business, make sure to check out the Wisconsin Secretary of State’s business naming rules. 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)

Wisconsin general partnerships that want to use a trade name (sometimes called a “doing business as” or DBA name) should take two key steps to do so. First, you should complete a name availability search to make sure you’ll be the only general partnership using that name. Once you’ve confirmed that your business’s name is unique, you can file a request for a trade name with the Secretary of State. Wisconsin is unique because it includes DBAs or trade names in its broad definition of “trademarks,” so don’t be intimidated by having to file for a trademark for your partnership.

Step 4: Draft and sign Partnership Agreement

In Wisconsin, crafting your Partnership Agreement is an essential part of creating a solid business. A Wisconsin General Partnership Agreement is the document that governs how your business operates. The types of rules your Partnership Agreement might cover include:

• Admission of new partners
• Dissolution of the partnership
• Resolution of conflicts
• Rights of individual partners

In the absence of a Partnership Agreement, your business has to rely on the Wisconsin Revised Uniform Partnership Act for guidance on how to operate. However, the Wisconsin partnership laws are a one-size-fits-all solution to the complex problems a business may encounter during its life. The guidance under these codes and rules may not be a good fit for your partnership’s needs. Creating a Partnership Agreement gives you the power to decide how you want to run your company. 

Step 5: Obtain licenses, permits, clearances

You might have to obtain certain licenses and permits before you can get your Wisconsin general partnership running. Working with our partners at Avalara, we can help compile a Business License Report. This report quickly identifies your licensing and permitting needs at the local, state, and federal levels of government. With this in hand, you’ll be able to apply for and get the licenses and permits you need without personally combing through thousands of regulations.

Step 6: Get an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is like a social security number for your business. You can get your EIN from the Internal Revenue Service (IRS). An EIN is essential so your partnership can properly pay its federal taxes. We can help get that task off your plate with our Employer ID Number Service. 

Step 7: Get Wisconsin state tax identification numbers

You may also need to register for a state tax ID. You can register for your Wisconsin state tax ID online with the Wisconsin Department of Revenue (DOR). Even if you don’t sell goods or services or even have any employees, your company may still need a state tax ID. Wisconsin DOR may ask you for your EIN to register for a state tax ID, so be sure to obtain your EIN first. Raise any questions about your partnership’s potential state tax liability with your accountant or other tax professional.

Forming a Business Partnership in Wisconsin: Next Steps

After you’ve formed your business, received permits and licenses, and set up your tax ID numbers, setting up a business bank account is your next logical step. You may also want to look into different types of business insurance, as well as potential office space if you want a dedicated space to work from. You will also want to keep up with your taxes.

How We Can Help

A Wisconsin general partnership is easy to start, inexpensive to maintain, and can be a great choice for many business owners to get going fast. But the small steps of legal compliance along the way may trip you up. Don’t worry, we won’t let you sweat the small stuff. Our renowned suite of business development and maintenance services can help you with development and compliance throughout the entire life cycle of your business.

If you ultimately choose to use a different business structure, we can help with our Wisconsin LLC and Wisconsin Corporate Formation Services. Our fast, easy formation services can help you file Articles of Incorporation or provide a template to craft an Operating Agreement so you can get started. We help prevent you from getting bogged down in paperwork and help keep your focus on running your new business.