When multiple individuals begin conducting business together, they may have effectively created a partnership, even if they didn’t intend to do so. Thus, even though partnerships can be formed without the partners actually signing a partnership agreement, the partnership and its partners become subject to state laws governing partnerships. The California business attorneys at Structure Law Group, LLP understand the laws and mechanics required to build a strong foundation for a partnership. Being careful and meticulous about the partnership formation process can also help to prevent litigation if and when a dispute arises between and among business partners.
Although not required under California law, as discussed above, entering into a partnership agreement when forming a partnership is highly recommended. A partnership agreement is a legally binding contract that, among other things, dictates the roles of the partners and establishes guidelines for management of the partnership. In addition, partnership agreements set out how potential legal disputes will be resolved.