The members of a partnership Firm may enter into a written contractual agreement, but such formality is not necessary. Generally, to determine whether a partnership existed, a court will ask whether there was a sharing of profits and losses, joint administration and control of the business, a capital investment by each partner, and common ownership of property. The court will also examine the intent of the parties.
Partnerships are governed almost exclusively by state law—tax concerns and jurisdictional issues are the only notable exceptions.
Basic Partnership deed drafting
Partnership deed drafting with deed registration
Due to the nature of the business, the partners will fund the business with start up capital. This means that the more partners there are, the more money they can put into the business, which will allow better flexibility and more potential for growth. It also means more potential profit, which will be equally shared between the partners.
A partnership is generally easier to form, manage and run. They are less strictly regulated than companies, in terms of the laws governing the formation and because the partners have the only say in the way the business is run (without interference by shareholders) they are far more flexible in terms of management, as long as all the partners can agree.
Partners can share the responsibility of the running of the business. This will allow them to make the most of their abilities. Rather than splitting the management and taking an equal share of each business task, they might well split the work according to their skills. So if one partner is good with figures, they might deal with the book keeping and accounts, while the other partner might have a flare for sales and therefore be the main sales person for the business.
Partners share the decision making and can help each other out when they need to. More partners means more brains that can be picked for business ideas and for the solving of problems that the business encounters.