Question

Partnership - Formation and Operation:

Brown and Green are forming a business as partners. If they do not create a formal written partnership agreement, what risks are they exposing themselves to?

Answer 1

Brown and Green who are forming a business should create a formal written partnership agreement otherwise they will be exposing themselves to a lot of risks like:

1. Ownership: Without written documents, it will be not clear as to who will own how much percentage in the partnership.

2. Roles and Responsibility in the partnership will not be cleared without a written document.

3. Control and Confidentiality so business information will not be leaked outside.

4. Who will bear the loss (in case) in future with how much percentage.

answered by: anonymous