What is a Partnership?
A partnership is formal when two or more pepole (partners) enter into business together with a vision to make profit. Both(or all of the) partners share the responsibilities, benefits, and risks involved in running the business.
If you engage in a partnership you will typically need to register a business name. Partnerships are best governed a Deed that states clearly the obligations and rights of each partner. This document is governed by the Partnership Act. For this reason, and many others, people looking to engage in a partnership often seek legal advice.
Partnerships can be formed using verbal agreements, which usually occur when friends enter into partnerships with each other, however in these cases the law assumes everything is shared equally, from profits to losses. As a result, when complications arise, it can be difficult for the partners to come to an agreement and maintain their relationship. Therefore, we recommend always seeking legal advice before entering into a partnership to avoid any disputes in the future.
What Legal Documentation is Required?
A business partnership should have a carefully drafted agreements which addresses the rights and responsibilities of the parties. This process should be viewed as a useful exercise for all parties because it eliminates uncertainty and really secures what each of your roles will be in growing your business successfully. It also forces the parties to carefully think through important issues which can help prevent disappointment later.
PCL Lawyers know no two businesses are built the same, that is why you will always find focused, tailored advice that is just right for your business goals.
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