Overview

Partnership is a group of two or more individuals who agree to start business jointly and to share the profits of a lawful business. It is managed and carried on either by all or by any, or a number of them acting for all. The formation of partnership is straightforward and simple. Each member of such a gaggle is individually referred to as ‘partner’ and collectively the members are referred to as a ‘partnership firm’. Each partner contributes to all or any aspects of the business, including money, property, labour, or skill. In return, each partner shares out of the available profits and losses of the business.

Because partnerships entail quite one person within the decision-making process, it’s important to debate a good sort of issues up front and develop a legal partnership agreement. This agreement should document how future business decisions are going to be made, including how the partners will divide profits, resolve disputes, change ownership (bring in new partners or take over current partners), and how to dissolve the partnership. Although partnership agreements aren't legally required, they're strongly recommended, and it’s considered extremely risky to work without one.