In a partnership agreement, which clause is essential to prevent disputes?

In a partnership agreement, which clause is essential to prevent disputes?

Step 1: Understand that a partnership agreement is a document that outlines how partners will work together.
Step 2: Recognize that one important aspect of this agreement is how profits will be shared among partners.
Step 3: Identify the profit-sharing ratio, which is the percentage or amount each partner will receive from the profits.
Step 4: Realize that if the profit-sharing ratio is not clearly defined, partners may have different expectations, leading to disputes.
Step 5: Conclude that having a clearly defined profit-sharing ratio in the partnership agreement helps prevent misunderstandings and conflicts.

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