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Home // Thinking of entering into business as a partnership but don’t have time to get a written agreement in place: think again.

Partnerships are akin to marriages, when things are going well there are likely to be no complaints. However, when things do not live up to a partner’s expectations, business tensions can arise; often resulting in ugly and expensive divorce proceedings for the partnership.

Partnerships which are formed without a written agreement are partnerships at will and are governed by the Partnership Act 1890.

This means they are regulated by the default provisions of the Act and may find themselves being bound by provisions which they had no intention of having. By way of example, under the Partnership Act all partners are entitled to a share of the profits and debts of the partnership equally; irrelevant of the level of contribution a partner has made to the partnership. Partners may also be jointly and severally liable towards third parties in respect of partnership liabilities.

However these points can be addressed in a bespoke partnership agreement in ways that are specific to the parties needs. For example if one partner is to receive 30% of the profit share that can be expressly drafted into the partnership agreement.

A partnership at will is such that upon a partner leaving or even where a new partner seeks to join, the entire partnership automatically dissolves in law. Whereas, a dissolution in a partnership which has a written agreement would only occur where; it has been ordered by the court or arbitrator or where all the partners agree to have the partnership dissolved.


Time and money spent on having a formal partnership tailored to a specific partnership is more beneficial. This is because it would take consider; the various needs of its partners, as well as providing solutions to those often-tricky questions or disputes. Thus on any analysis, can only be viewed as an investment.

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