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Partnerships · San Jose · Registered LDA #268
Partnership Agreement in San Jose — put the deal in writing
If you and a partner run a business together, California may already treat you as a general partnership — and each of you can be personally liable for debts the other one signs. Without a written agreement, state default rules decide how profit is split and what happens when one of you wants out. We prepare your partnership agreement, partnership filings and EIN at your direction.
In our San Jose office or remotely · English, Vietnamese and Cantonese · Spanish through our staff
- General partnership agreement
- Statement of Partnership Authority filing
- Limited partnership formation and agreement
- Federal EIN for the partnership
Do business partners in California need a written agreement?
California does not require a general partnership to file anything or sign anything, which is exactly the risk: without a written agreement, partners share profit equally regardless of what each invested, any partner can bind the business, and each general partner is generally personally liable for all partnership debts. TruPoint Legal, a registered Legal Document Assistant (LDA #268) in San Jose, prepares partnership agreements, the Statement of Partnership Authority, limited partnership filings and the partnership’s EIN. Owners who want liability protection for everyone often form a multi-member LLC instead.
Problems a partnership agreement prevents
Unequal money, equal split
One partner put in $50,000 and the other put in time. Without an agreement, profit is split equally anyway.
A partner signs a bad contract
Any partner can bind the business in the ordinary course — and every general partner can be liable for it.
A partner wants out
No agreed price, payment schedule or non-compete means negotiation at the worst moment, or court.
A partner dies or divorces
Heirs or a former spouse can end up with a claim on the business. Buy-sell terms decide what they receive.
Deadlock between two partners
Fifty-fifty with no tie-breaker can freeze the business. The agreement sets how decisions get made.
You need a bank account
Banks ask for the partnership’s EIN and, usually, the agreement showing who can sign.
Partnership or LLC: what changes
You choose the structure. This is how they generally differ in California.
| General partnership | Limited partnership | Multi-member LLC | |
|---|---|---|---|
| State filing to form | None required | Certificate of Limited Partnership ($70) | Articles of Organization ($70) |
| Owners’ personal liability | Every partner liable for all partnership debts | General partner liable; limited partners generally not | Owners generally protected |
| $800 California minimum tax | No | Yes | Yes |
| Governing document | Partnership agreement | Limited partnership agreement | Operating agreement |
| Tax returns | Form 1065 and CA Form 565 | Form 1065 and CA Form 565 | Form 1065 and CA Form 568 |
Limited liability partnerships (LLPs) in California are limited to certain licensed professions, such as law and accounting.
What we prepare
- General partnership agreement: contributions, profit and loss shares, decision-making, signing authority, withdrawal, buyout, death, divorce and dissolution
- Statement of Partnership Authority, filed with the Secretary of State, showing who may sign for the partnership
- Certificate of Limited Partnership and limited partnership agreement
- Federal EIN for the partnership
- Conversion path to a multi-member LLC with an operating agreement
- Partnership returns (Form 1065 and Form 565) through Fingerscan Digital Inc., our same-office sister company
Partnership questions
Do we have to file anything to be a partnership in California?
Not for a general partnership. Two or more people who run a business together for profit can be a general partnership without any state filing. A Statement of Partnership Authority may be filed with the Secretary of State to show who can sign. A limited partnership must file a Certificate of Limited Partnership with the Secretary of State.
Am I liable for my partner’s business debts?
In a general partnership, yes. Each general partner is generally personally liable for all partnership obligations, including those created by another partner acting for the business. A partnership agreement sets rules between the partners but does not remove that liability to outsiders; a multi-member LLC or a corporation does.
What happens if we have no partnership agreement?
California default rules apply. Partners share profits equally regardless of how much each invested, any partner can bind the partnership in the ordinary course of business, and there is no agreed price or process if a partner wants out, dies or divorces.
Partnership or multi-member LLC?
The choice is yours. A multi-member LLC is taxed like a partnership by default but protects every owner’s personal assets from business debts, and its operating agreement does the work of a partnership agreement. A general partnership pays no $800 California minimum tax; an LLC and a limited partnership do.
What tax returns does a partnership file?
A partnership needs an EIN and files federal Form 1065 and California Form 565 each year, and gives each partner a Schedule K-1 to report their share of income on their own return.
Other business formation services
Protect the partnership before it is tested
Bring your partner to a free consultation. You decide the terms; we put them in writing and file what needs filing.
TruPoint Legal LLC · Registered Legal Document Assistant LDA #268, Santa Clara County · CALDA member. We are not a law firm and do not give legal advice.