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 the following:

  • 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 for everything?);
  • 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; and
  • 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 returns.

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 DBAs.