Partnership is an association of two or more people to engage in business for the purpose of proportionately sharing the profits and losses of that business (as well as assets and liabilities). This means that partners decide on how they will share the profits and losses in % terms. A partnership can be formed in writing or orally, as what makes an association a partnership is not the paperwork, but the actions of the members of a business association. In other words, if people act like “partners,” then they will be recognized and treated as partners under California partnership law.
Despite that, like in any business deal, written partnership agreements are highly recommended to memorialize the essential terms and conditions of the business relationship and to avoid misunderstandings between the partners.
Like any other relationship, such as friendship, marital ties, etc… a business partnership necessarily involves and thus depends on the character and the emotions of its members. Thus, it is absolutely crucial that if you decide to enter into a business partnership with another person/s, you should actually like each other, respect each other, and at least somewhat feel comfortable around each other, as you will be spending a lot of time together.