When defining partnerships, how is a consensus reached?

A partnership is fundamentally defined by the mutual agreement of the parties involved. This mutual consent among the partners is essential because a partnership is a relationship that arises from the intentional association of two or more individuals or entities who share a common business purpose and agree to share in the profits and losses.

While written documentation, such as a partnership agreement, can help clarify the terms of the partnership and is often advisable for legal protection, it is not the sole determinant of a partnership's existence. Partnerships can indeed be created through oral agreements, although this might lead to complications in proving the terms of the partnership in the event of a dispute.

The idea that partnerships require guaranteed profits or that a verbal agreement is always insufficient is misleading. Partnerships can be formed without an initial guarantee of profit, as the success of the partnership lies in the collective effort and agreement of the partners to work towards a common goal. Thus, the essence of forming a partnership rests on the mutual agreement of the parties involved and not solely on formalities or profit assurance.