Every partnership agreement template online opens with the same question: how should ownership split? That question matters, but it is not the one that ends up destroying partnerships. The one that does is what happens when a partner wants out, and almost no template drafts it, because almost no founder wants to discuss it before it is needed. For a two-person partnership specifically, the state's own default answer to that question is often worse than either founder would ever guess.
Cobblestone Habitat Design, a fictional two-person landscape design and build partnership doing $340,000 in trailing annual revenue, ran its arrangement through this process. Dana Voss had contributed $60,000 in starting capital; Marcus Ilha contributed the design expertise and all client-facing work, no cash. They had split ownership and profit 50/50 by handshake, with no written agreement at all, an at-will general partnership by default from the day they started taking paying clients.
Under California's default rule, a two-partner, at-will partnership dissolves and winds up once at least half the partners express the will to leave, and one partner's ordinary exit counts as that expression on its own. Modeled against their real numbers, forced liquidation would net each partner about $21,000, a fraction of the $71,250 going-concern buyout either could receive instead. The other $100,000 of value gets destroyed by the winding-up process itself, evaporating for both partners instead of passing to either one.
Partnership Agreement Template for Founders