Partnership

Now let's look at partnerships: Just like in any other element of society, when more than one person is involved, things become a little more complicated. As you'll see, unlimited liability is an issue with partnerships as well. Read this section and in light of what you learn, think about what advice you would give Jason in the exercise at the end of the section.

The Partnership Agreement

The impact of disputes can be lessened if the partners have executed a well-planned partnership agreement that specifies everyone's rights and responsibilities. The agreement might provide such details as the following:

Amount of cash and other contributions to be made by each partner
Division of partnership income (or loss)
Partner responsibilities - who does what
Conditions under which a partner can sell an interest in the company
Conditions for dissolving the partnership
Conditions for settling disputes