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Ontario|Business LawPartnerships 214 Partnership agreements If you decide to form a partnership, you should put a partnership agreement in place. A partnership can exist without having a formal, legal partnership agreement, but such an agreement can help you avoid problems.
A partnership agreement establishes rules about how the business is going to be run. It usually includes such things as who the partners are, what bank the business will use, how the profits or losses of the business are to be divided among the partners, what the capital contribution of each partner will be, what the role and responsibilities of each partner will be, and how the partnership can be dissolved. Establishing these business details at the beginning of a business relationship can help avoid disagreements in the future.
Many of these details can be decided between the partners before they approach a lawyer to finalize the agreement. However, creating a partnership agreement is a detailed legal process. You should have a lawyer help you create the agreement, or at least have a lawyer review the agreement before you sign it.
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