Let's investigate partnerships a little deeper, using a few scenarios to help with its practicality. Consider the following hypothetical situations. Situation #1 Suppose you were to start a business partnership with your friend. It is agreed upon with your friend, that he will invest 70% of the capital to start the business and he will have 30% ownership. You will invest 30%, but you will have to borrow your initial investment from the friend. The friend will receive both his and your share of the profits until the borrowed amount is paid back. Questions: What if there are no profits? Do you still owe the money to your friend? Situation #2 Let's say you enter into a partnership with two friends of yours who happened to be cousins to each other. At some point, the cousins decided that they would like to bring in a fourth partner, another cousin. You don't know the new cousin and are against the idea. Questions: What happens now? Can they outvote you? Do you have a veto? Situation #3 You and a friend each invest $8000 to start up a partnership. A few weeks into the business, your friend tells you that he has changed his mind and wants out. You say "OK you're out." The friend says "Good, now give me back my $8000". You explain that the money has been spent on equipment, but when the business starts to make money you will pay him the $8000. Your friend wants his money immediately and insists that the equipment be sold and that he get his share. - You refuse. Question: Who's right