A partnership can exist where two or more people or entities carry on a business activity for the purposes of earning profit. It can exist without a formal agreement. It is not an incorporated entity and each of the partners can therefore be personally liable for any claim made against the partnership. A partnership agreement can formalize various aspects of the partnership arrangement, including confirming that the arrangement is a partnership, setting out the respective partnership interests, providing for limited liability, if available, and providing for an exit strategy. Without a formal agreement in place, the general rules of partnership will apply and the partnership cannot be tailored to your specific circumstances.