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What is a partnership?

A general partnership is created when two or more people decide to carry on a business together. A partnership usually operates in accordance with a partnership agreement. A general partnership agreement is a legal document defining how the business will operate.

The agreement helps partners delineate how they will make decisions and what role each person will play in running the business. Many partnerships eventually face a crisis if they fail to create a general partnership agreement.

By creating a partnership agreement, the partners can lay the groundwork for productively solving problems and avoiding disputes in the future.