Guide To Establish Partnership Firm In Virginia

A partnership is an agreement between two or more people to conduct business together and share the profits, losses and liabilities in a pre-determined ratio. Partnership businesses are easy to set up and are most commonly found business organizations in Virginia. The partnership firms in Virginia are covered by the Virginia partnership law and the agreement between both the partners.

All the partnership firms need to file an application for Virginia Tax ID. The EIN or the tax Id is legally required to carry on business of partnership firms. The Tax Id is required to hire employees and withhold payroll tax, open bank accounts and obtain line of credit from banks, to file tax returns and to obtain the legally required permits and licenses for the business.

Partnerships are not required to file any legal documents to start business in Virginia. The partnership is deemed to have been formed when two or more individuals start doing business together. However, partnership firms can file a statement of partnership authority with the State corporation commission. This statement helps the partnerships to create a public existence for their business firm. The statement should contain the details like the names and addresses of the partners, the name and address of the partnership firm and the name of the registered agent, responsible for conducting the legal documentation.

Partners entering into the contract must prepare a partnership agreement to specify the terms and agreements of the operation of the business. If an agreement is not drawn, all the partnerships will be subjected to the rules of the Virginia Partnership law.

Partnership firms who want to operate the business in a fictitious name, other than that of the partners must register the name with the office of the clerk of the circuit court located in the county where the partnership operates. This name is very important and has to be mentioned in the application for Virginia Tax ID.

The partnership firm must file an application for Virginia Tax ID on the website of IRS. The unique tax ID helps the Government to recognize the partnership for tax purposes. It is advisable to apply for an EIN, as soon as you start the planning of the business to eliminate any delays in further process. EIN is legally required to operate partnership firms in Virginia.

The last step is to obtain all the other necessary permits and licenses to carry on the business. A local firm can obtain county and city licenses, whereas a big firm operating business throughout the state may need a state-wide license. Partnerships must fill the application for Virginia Tax ID and obtain the EIN, for procuring all the other licenses.

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