So . . . you’ve been talking to someone else about the possibility of going into business together. Great! Two heads are often better than one – you get twice as many ideas, money, and hands to do the work. But before you trot down to the county to file your DBA statement, kick in money or assets, or, really, do anything to get the business going – write up a partnership agreement.
Yes, sit down with your prospective partner, agree on some basic operating parameters, and write them down. Do this now, while everyone’s happy and enthusiastic and on the same page. You might not need a lawyer for this – just write down what you’ve agreed on, sign it, and put it in a safe place.
The reason is simple – you don’t need a written piece of paper to form a partnership, in law. Folks were shaking hands and making deals long before computers, typewriters, or even widespread literacy. In law, a partnership is simply an association of two or more people to carry on a business for profit.
There’s no requirement that each partner kick in money, let alone equal shares. But unless the partners agree otherwise, any profits are shared equally, not in proportion to partners’ contributions. And any losses are shared in the same proportion as the profits. Partners all have equal management rights. One partner can be personally liable for another partner’s actions on behalf of the business. Partners can freely sell or give their partnership interests to others. Adding a new partner requires the unanimous consent of the existing partners.