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Business Partner going out of State

Asked by: Daniel  — 16 January, 2013

Hello,

I’m currently in a General Partnership (“DBA”) in OR with one other person. We self-publish e-books to various retailers online. I do most of the business side of things on my computer while using Paypal for transactions, e-mailing my free-lancers to keep them on schedule, and handling all phone calls on my cell in addition to writing content for publication. My business partner handles the editing of each manuscript that comes our way and promotes the books online through social media and message forums. Now, she is moving out of state to California. If she continues the same tasks, which she wants to, (I will mail her a printed copy of each manuscript for her to edit), would that be considered “doing business” in CA even though it seems to me no transaction is taking place? Would her share of income be considered “doing business” in CA or OR when I mail her share as a check (i.e. what state taxes that money)? Would we need to register our partnership as a Foreign Entity in CA even though the main operations is within OR using my computer online?

Thanks for your time.

Answered by: admin  — 16 January, 2013

Daniel,

Your case is relatively easy. General Partnership is not an organized entity, and therefore doesn’t need to be registered with any state. DBA is just an alias, and as such gives you the right to use the DBA name in the jurisdiction where you registered it (state, county, town, etc).

You could register another DBA in the county where your partner is moving to, if you decide to open a bank account for the partnership there, but in general it’s not a must.

Tax-wise General Partners are taxed on their share of profit, so she would need to report her income just as she did till now, except she would also need to pay the California income tax.

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