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Sukhi Hansra October 12, 2026
That surprises a lot of people. There is no registration step that creates a partnership in Ontario and no document you have to sign. It simply exists, and until you put a written agreement in place, the rules that govern it are the default rules of the Partnerships Act rather than anything you chose.
We prepare partnership agreements and joint venture agreements for businesses across Ontario. Most of the value in this work comes from replacing the default rules with terms you actually chose, before a disagreement makes those defaults expensive.
If you have no written partnership agreement, Ontario’s Partnerships Act fills in the terms for you. These are the defaults that apply to your business right now:
This means that the riskiest version of a partnership is the one most people actually have. Two people who trust each other, sharing revenue informally, with nothing in writing. Everything works until it doesn’t, and when it doesn’t, the rules that decide who gets what are rules neither of you picked.
A partnership agreement replaces those defaults with decisions you made together while you still agreed with each other. The core of the document is a short list of questions that are easy to answer now and painful to answer later:
The exit terms are the ones that earn their fee. Partners rarely fall out over how to split profits in a good year. They fall out over one partner wanting out, or wanting the other one out, and with no agreed process the only options left are a negotiated settlement from a weak position or a dissolution that destroys the value both of you built.
A joint venture is different from a partnership, although the two get confused constantly. In a joint venture, two existing businesses combine on a specific project or opportunity while remaining separate businesses. A contractor and a supplier bidding one large project together. Two companies co-developing a product that neither could build alone.
The legal risk runs in the opposite direction from partnerships. With partnerships, the danger is having no structure at all. With joint ventures, the danger is accidentally creating a partnership when you meant to create something more limited, because if your joint venture looks like carrying on business together with a view to profit, the Partnerships Act defaults above can attach to it, including personal liability for the other company’s obligations.
We structure joint ventures two ways, depending on the project:
We also act for partners who are leaving, buying out a partner, or winding a partnership down. Most of this work is transactional rather than adversarial. A buyout agreement that values the departing partner’s share and papers the payment terms. A dissolution that divides assets, settles debts, and deals with the business’s contracts and lease cleanly. Getting the paperwork right here matters, because a partner who walks away without a signed release stays exposed to the partnership’s debts, and a buyout on a handshake is how the same dispute happens twice.
That is exactly the situation an agreement exists for. A 50/50 partnership with no agreement has no way to break a tie and no way for either partner to exit except dissolving the whole business. The time to fix that is while you still agree on everything, because the agreement you negotiate then will be fair. The one you negotiate mid-dispute will not be.
For most ongoing businesses, incorporation gives you limited liability that a partnership never will, and we incorporate far more businesses than we paper as partnerships. But the answer depends on tax, on your industry, and on what you and your co-owner are actually building. See our incorporation page for how we approach that decision, or raise it on a discovery call and we will tell you which structure fits.
A partnership agreement governs one ongoing business owned together. A joint venture agreement governs a specific project between businesses that stay separate. If your project has no defined end and you are sharing all profits generally, you likely have a partnership regardless of what the document is titled, and it should be papered as one.
If you have no written agreement and no fixed term, yes. Under Ontario’s Partnerships Act, a partnership with no fixed duration is a partnership at will, and any partner can end it by giving notice to the others. A partnership agreement replaces that with a proper exit process, which protects both of you.
Reviewed by Sukhi Hansra, Business and Franchise Lawyer at Hansra Law.
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