Form a Partnership in Texas
Everything you need to know about forming a Partnership in Texas. Filing fees, requirements, timeline, and step-by-step guidance.
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How to File
Choose a Partnership Name
Select a unique business name that complies with Texas naming rules. For LPs, the name must include 'Limited Partnership' or 'L.P.'; for LLPs, it must include 'Limited Liability Partnership' or 'L.L.P.'
1-2 hours
Search Name Availability
Use the Texas Secretary of State's SOSDirect database to confirm your chosen name is not already in use by another registered entity in Texas.
15-30 minutes
Designate a Registered Agent
Appoint a registered agent with a physical Texas street address who will receive legal and official state documents on behalf of the partnership. The agent must consent to the appointment.
30 minutes
Draft and Sign a Partnership Agreement
Create a written partnership agreement outlining each partner's contributions, profit and loss sharing, management responsibilities, and dissolution procedures. Though not legally required in Texas, it is strongly recommended.
2-5 hours
What's Next After Filing
Once your Partnership is officially formed, you'll want to complete these important steps:
- •File the Certificate of Formation (LP or LLP) — For Limited Partnerships, file Form 207 (Certificate of Formation – Limited Partnership) with the Texas Secretary of State. For LLPs, file Form 701 (Application for Registration as a Limited Liability Partnership). General Partnerships may file a Statement of Partnership Authority (Form 701) optionally.
- •Obtain an EIN from the IRS — Apply for a Federal Employer Identification Number (EIN) from the IRS online at no cost. This is required for tax filings, opening a business bank account, and hiring employees.
- •Obtain Licenses, Permits, and Open a Bank Account — Register for Texas state taxes via the Texas Comptroller if applicable, obtain any required local or industry-specific business licenses or permits, and open a dedicated business bank account to keep finances separate.
Advantages
- ✓Simple and inexpensive to form, especially for General Partnerships which require no mandatory state filing
- ✓Pass-through taxation means profits and losses flow directly to partners' personal tax returns, avoiding double taxation
- ✓Flexible management structure with no required board of directors or formal corporate formalities
- ✓Partners can pool complementary skills, resources, and capital to grow the business
Considerations
- •General partners face unlimited personal liability for business debts and legal judgments, putting personal assets at risk
- •Potential for disputes between partners over decision-making, profit sharing, or exit strategies without a strong partnership agreement
- •Limited access to capital compared to corporations, as partnerships cannot issue stock to raise funds
- •Partnership may dissolve or require restructuring upon the departure, death, or bankruptcy of a partner
Annual Obligations
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