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Mark Kohler discusses the importance of establishing a legal structure for partnerships in his two-minute tax and legal tip. He highlights that many individuals make the mistake of forming partnerships through informal agreements, like handshakes or emails. Kohler introduces the basic joint venture agreement, cautioning that it can be risky as it is classified as a general partnership, exposing both parties to personal liability for each other's actions. This structure is not ideal for asset protection but serves as a starting point. He stresses the necessity of having a quality joint venture agreement, which is sometimes referred to as a partnership agreement, to formally outline the collaboration between parties.
