A Partnership Agreement is generally required whenever a new business venture commences and two or more people (acting as partners) enter into business together with an object of making a profit. A Partnership Agreement is necessary as a foundation of your business partnership, ensuring that your interests, and that of your partners, are clearly understood and protected. All partners within the partnership share the responsibilities, benefits and risks involved in operating the business venture.
Partnership agreements can contain information which outlines what happens where a partner dies, becomes disable, separates from a spouse or has children. A partnership agreement also outlines agreements reached to buy-out or sell-out to the remaining partners in certain situations.