A partnership agreement is crucial for several reasons: - Clarifies Roles and Responsibilities: It defines the roles and duties of each partner, ensuring everyone knows their responsibilities. - Minimizes Conflicts: By setting clear guidelines, it helps to reduce the potential for disputes. - Provides Legal Protection: In case of disagreements or legal issues, the agreement serves as a reference. - Fosters Effective Decision-Making: It outlines the process for making decisions, which can streamline business operations.