KEY POINTS

• Creating a partnership agreement isn't generally required by law.
• You can form a partnership based on your intent to do so and by taking actions such as pooling resources.
• A partnership agreement can help prevent disaster, even if it is not required.

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If you are thinking of starting a small business, finding a partner could make getting off the ground easier. A partner could share the risk and share the workload, as well as bring new ideas to the table.

If you decide to form a partnership for your company, you may be wondering if you need a formal partnership agreement to do so. Here's what you need to know.

Partnership agreements usually are not required

When you form a partnership, you usually do not need to create a formal written contract. Partnership relations can be created when you come to either an express agreement or an implied agreement.

And if there's a question about whether a relationship existed, courts will look at many things to decide including what you intended to do, whether you shared profits and losses in a business bank account, and how much money you each contributed to the business.

Since no partnership agreement is required by law, there's often very little you actually need to do to start working together and get your business off the ground. Usually, it's a simple matter of selecting a company name, registering it with your state, getting your Employer...

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