What is a Partnership DBA?
In a partnership DBA, two or more people share ownership of a single business. The
law does not distinguish between the business and its owners; a partnership DBA
is not a separate legal entity, but rather an extension of the owners.
In a sole proprietorship DBA, one single
person is the business. But in a partnership, there must be an agreement among all
partners dictating how the business is to be run, just as with corporate bylaws
or an LLC operating agreement. A partnership agreement should, at minimum, set forth
How much capital each partner will contribute and what their continuing obligations
are to fund the partnership;
How decisions will be made (is the agreement of both partnership members required
How profits and losses will be shared;
How partnership disputes will be resolved;
How partners can sell their interest and/or be bought out by the other partner;
How the partnership should be dissolved.
Advantages of a Partnership DBA
Partnership DBAs can be started very simply.
The profits and losses of the business flow directly to the partners’ personal tax
Disadvantages of a Partnership DBA
Partners are jointly and individually liable for the actions of the other partners.
The absence of a good partnership agreement can be problematic, leading to misunderstandings
and confusion on which partner is responsible for what and how decisions can be
made about the business.
Partners are personally liable for the debts and obligations of the partnership—and
that liability is shared equally among the partners. For example, if one partner
made a poor business decision, all partners are equally responsible for the consequences
of that decision.
Learn how partnership DBAs fit in with other types of