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 Your Partnership Type
Decide between a General Partnership (GP), Limited Partnership (LP), or Limited Liability Partnership (LLP). GPs require no state filing, while LPs and LLPs must file formation documents with the Texas Secretary of State.
1-2 hours
Select and Register a Partnership Name
Choose a unique business name that complies with Texas naming rules. For LPs and LLPs, search the Texas SOS name database to confirm availability and ensure the name includes the required designator such as 'L.P.' or 'LLP'.
30 minutes
Designate a Registered Agent
Appoint a registered agent with a physical Texas street address who is authorized to receive legal and official documents on behalf of the partnership. The agent can be an individual Texas resident or a qualified entity.
30 minutes
Draft and File the Certificate of Formation
For LPs, file Form 207 (Certificate of Formation – Limited Partnership) with the Texas Secretary of State online via SOSDirect, by mail, or in person, along with the $200 filing fee. General Partnerships are not required to file formation documents with the state.
1-2 hours
What's Next After Filing
Once your Partnership is officially formed, you'll want to complete these important steps:
- •Draft a Partnership Agreement — Create a written partnership agreement outlining each partner's roles, capital contributions, profit and loss sharing, decision-making authority, and procedures for dissolution or partner changes. While not legally required in Texas, this document is strongly recommended to prevent disputes.
- •Obtain an EIN and Open a Business Bank Account — Apply for a free Federal Employer Identification Number (EIN) from the IRS online, which is required for tax filing and opening a business bank account. Keeping finances separate from personal accounts is essential for record-keeping and credibility.
- •Register for Texas State Taxes and Obtain Licenses — Register with the Texas Comptroller of Public Accounts for applicable taxes such as sales tax or franchise tax if required. Obtain any necessary local or industry-specific business licenses or permits required to legally operate in Texas.
Advantages
- ✓Simple and inexpensive to form, especially General Partnerships which require no state filing fees or formal paperwork with the Texas SOS
- ✓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 officer titles, allowing partners to define roles as they see fit
- ✓Partners can pool resources, skills, and capital, making it easier to fund and operate a business collaboratively
Considerations
- •General Partners face unlimited personal liability for business debts, obligations, and the actions of other partners, putting personal assets at risk
- •Partnerships dissolve upon the death, withdrawal, or bankruptcy of a general partner unless the partnership agreement specifies otherwise, creating instability
- •Raising investment capital can be more difficult compared to corporations, as partnerships cannot issue stock or attract certain types of institutional investors
Annual Obligations
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