Business Partnerships

Richard Booth: You don't need to have a written agreement to have a partnership. You may find yourself actually in a partnership without knowing that you're in a partnership. Edward Hiller: You form it by starting a business. There is no formal formation. Richard Booth: Partnership requires no filing with the state whatsoever. Edward Hiller: It just becomes a business when you start it, and don't do anything else. Richard Booth: A partnership is what we call the default form of organization, in that you can form one inadvertently simply by being in business with other people. Fred Provorny: A partnership in its legal sense is an entity that has one or more individuals who have joined together to create the entity for the purpose of making a profit. Richard Booth: Co-owners who are running a business together for profit, can be deemed to be partners with each other and therefore liable for the obligations created by each other in the context of doing business. Edward Hiller: All your personal assets are on the line. Richard Booth: Now that can be a problem in many cases, because one partner may not know what the other partner is doing. Edward Hiller: All the personal assets are on the line. Richard Booth: One partner maybe less careful than the other partner. Edward Hiller: All the personal assets are on the line. Richard Booth: A little bit reckless with either money or materials. Edward Hiller: All the personal assets are on the line. Richard Booth: They're liable for the accidents that the other partners might get involved with. Edward Hiller: All the personal assets are on the line. Richard Booth: The only solution I can think of is to have a legal document that spells out the best case and the worst case scenarios. Edward Hiller: All the personal assets are on the line.