Phillipe provides consultancy services around land development. As a former municipal planner, he has vital skills for the job.

With rapid development in the GTHA, business is picking up significantly. Phillipe wants to expand his services, and finds several other professionals who can assist. Cindy is willing to provide some capital, loaning the business $1 million, to be paid back when the business shows profits. Salome is a financial analyst, who quits her job to join this business, and is willing to be compensated as an employee, with a bonus when the business is more profitable. All are in a hurry to get started on the work, so nothing is formalized with their arrangement.

Three months later, the business is sued as a result of services that Phillipe provided last year, before the others got involved. Phillipe tells the others that because they are all partners now, they are all responsible for any liability from the business. He says that they are all carrying on business together to create a profit, which creates partnership in common law.

Are the others involved in this business likely liable for the lawsuit? How does personal liability operate in this context?