Partnerships can be formed in a number of ways. However, partnerships differ from a company or being shareholders within a company as a partnership is not a separate legal entity. As such, each partner will owe obligations to the business and debts incurred can also transfer personally.
A partnership can form without any contracts or documentation. Each party to the partnership owes a duty to third parties, this means that if one partner incurs debts or makes a poor decision on behalf of the partnership, the other partner will be equally liable. It is important that a distinction is drawn between yourself and another business or partnership if you have not been involved, and draft a contract setting out the rights and obligations of each partner to prevent personal liability.
Our team can assist you in evaluating potential risks of your partnership arrangement and draft contracts to protect your rights.