How Can I Start a San Diego Partnership or Sole Proprietorship?

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Sole Proprietorships and Partnerships

Sole proprietorships and partnerships are an alternative to LLCs and corporations, which may be desirable to some San Diego entrepreneurs. Models like sole proprietorships and simple partnerships are simple, but can also leave owners exposed to liability. We can guide you in determining which is best for you, and can help you create either kind of business.


Sole Proprietorship

This business model is sometimes referred to as the sole trader. This one is easy. If you want to set up a company you simply apply for a business license, file a fictitious name statement (after advertising) and bingo…. you are in business. The good news is that it is very fast and also very easy. The bad news is that it offers you no liability protection. In California of all places, liability control is an issue. People sue very quickly and everyone knows a lawyer….in fact even my dog has a law degree. There will always be someone willing to take a case. Be careful out there.


A Partnership is where more than one person is involved. You should have a Partnership Agreement, a contract that outlines all of the contingencies that can occur. The contract you create will be one of the most important aspects of your operation as today you get along, but one day for whatever reason you might not (ask any divorced couple which was once in love). A partnership agreement and nothing else offers you no protection. Again, you will always need a license and a fictitious name filed.

Partnerships can come in a variety of forms, including a Limited Partnership, which offers liability protection. A Limited Partnership Agreement is a complex document often used by people in Real Estate. It allows some partner(s) to manage, and others to simply invest with participation that is limited or allowed by the contract.

When people speak of partnerships they normally do not refer to Limited Partnerships and as a result they do not have the protections of a Limited Partnership. The problem with partnerships as well, is that people who enter into them to do not map out all of the possible issues that can happen. for example, let’s say that one of the partners is disabled or dead. That partner has the “spouse from hell”; with that partner gone, is that spouse your new partner? There are a multitude of issues that can befall a partnership. It is best to draft a solid document between the partners that maps out everything in advance, because if you don’t, by the time you do, it is too late and you will be spending time in litigation, as many of our clients have done.

How to Start a Partnership or sole Proprietorship



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