Even the best of friends or close family friends should  sign a business partnership agreement to avoid miscommunications and legal problems that can arise even  when there’s no disagreement. A partnership is a less-formal operating structure than an incorporation; a partnership agreement can protect owners in the event of the death of one partner, a dispute, a sale to a new partner or the dissolution of the business, among other benefits. But without this piece of legal document, things can get ugly fairly quickly regardless of the relationship with your business partner. The partnership agreement is a living breathing legal document. It spells out exactly who owns what percentage of a business. A majority partner might take on more of the responsibility in exchange for more of the profits. He also might ask for the opposite scenario, taking less day-to-day responsibility for operations in exchange for putting up a bigger investment and taking a larger share of the profits. If the business is sold, a partnership agreement delineates who gets what. This also your chance to make it right if you have been operating your business with your partner(s) in the absence of this importance document.