Any two individuals or businesses can enter into a partnership. Although a partnership does not offer the liability protection to the partners that a corporation can offer to its shareholders, partnerships tend to be less cumbersome, easier to manage from an administrative standpoint and require few, if any, document filings with governmental agencies.
To make sure that every partner understands his or her role, responsibility and compensation, it is critical to outline the specific terms of the partnership upfront, focusing on ownership, capitalization and operational issues. Most people tend to choose to enter into an agreement addressing these important business topics in the early stages, so that there is no confusion or ill will amongst the partners later on.
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