No Partnership Agreement
Similar to the deadlocked company are those businesses where two (or more) people have gone into partnership but have neglected to conclude a partnership agreement beforehand. There is nothing wrong with this per se, as partnerships do not need to have a written agreement in order to operate, BUT, if things go wrong somewhere down the line, often the only way to dissolve the partnership and divide the assets is to go to court, which is stressful, time-consuming and very expensive. Moreover, if the partnership is not doing well, the partners remain locked together in a situation where they are both jointly and severally liable for the debts as partnerships generally do not benefit from limited liability as a company does.
Simply put, it is vital that people who are thinking of entering into a partnership with each other take legal advice and ensure they conclude a well-drafted partnership agreement.
