If you and a friend are getting ready to start a small business, partnership agreements are essential. Even if you trust each other with your lives, getting things down on paper is simply good business sense. If one of you passes away, what will happen to the business? Should one of you file bankruptcy, will the partner take over the business? What if you decide the business is not for you, how will you dissolve the partnership? What will be your personal responsibilities in the business? Will you be in charge of the money or out on the floor with the customers? Partnership agreements answer all of these questions and make sure that everything is legal and binding.