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by eplanit
3301 days ago
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I know IANAL, but I don't think you are either: "if two people have joined together with the intent of making a for-profit enterprise but with no formal agreement, it is a partnership." No, it's not. What is "joined together....but with no formal agreement"? You can't take that to the bank, or to the court house. |
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I'm not, but I did pass Corporations (which, despite the name, covers all manner of business entities) before I left law school, so there's that.
> No, it's not.
Yes, partnerships absolutely can be formed why mere combination with a common purpose and no formal partnership document. In fact, much of the law of partnerships arose out of courts deciding how to resolve problems where people had done that.
> What is "joined together....but with no formal agreement"?
A relatively common situation that potentially creates a legal mess when it falls apart, or some third-party makes a claim involving the business.
> You can't take that to the bank, or to the court house.
You probably can't take it to the bank, because banks hate dealing with legal uncertainty and will demand that you resolve it first. You absolutely can take it to the courthouse, and many people have; of course, you'd usually do better to have a written agreement in place first, but that's often clearer in hindsight.
Moreover, other people can take you to court for it (including based on the conduct of your partner), so if you have formed a partnership by cooperation that you no longer want to have, you absolutely do want to make sure you have effectively dissolved it.