What happens if an Ontario partnership doesn't have a partnership agreement at all?

If partners never put a written agreement in place, Ontario's Partnerships Act default rules fill the gap and govern the relationship instead — including equal sharing of profits and losses regardless of each partner's actual contribution, equal rights for each partner to take part in managing the business, and rules allowing any partner to dissolve the partnership by giving notice if it isn't for a fixed term. These defaults apply automatically the moment two or more people are found to be carrying on business together with a view to profit, whether or not they intended to form a legal partnership at all.

The problem is that the statutory defaults rarely match what the partners actually intended, especially around profit splits, decision-making authority, and what happens if someone wants to leave or the partners disagree. Because the partnership relationship itself doesn't require any paperwork to exist, it's easy for people to end up as legal partners, with full unlimited joint and several liability for each other's business acts, without ever having discussed the terms. Putting a written agreement in place — even a relatively simple one — is one of the most valuable things partners starting a business together can do early.