A partnership is an "association of two or more persons to carry on as co-owners a business for profit."
Partnerships can be formed informally. The most important factor in determining whether or not a partnership was formed is whether or not there was an agreement to share profits. Agreeing to share losses, mutual right of control, and a community of interest in the venture are also factors often considered.
Important rules for partnerships include:
- Every partner has the right to perform the partnership's business and to participate in the management of the partnership. Partners have equal voting power.
- Partners share equally in the profits and losses of the partnership.
- The partnership is liable for contracts entered into by partners acting with either actual authority or apparent authority.The partnership is also liable for torts committed by partners acting with authority or in hte ordinary course of the partnership business. Partners are personally liable to third parties for the obligations of the partnership.
- It takes unanimous agreement to admit new partners.
- Partners owe fiduciary duties to each other.
- Every partner may dissolve an at-will partnership.