Business partnerships can easily be a source of liability. Why? Similar to joint accounts, you are responsible for the actions of your partner, that includes any liabilities. However, unlike a joint account, a lawsuit against your partner can put all of your assets at risk. For instance, if you and a friend come to an informal agreement to provide consulting services and your “partner” is involved in a legal dispute regarding your consulting services, your personal assets could likewise be at risk. The best advice is to avoid basic partnerships and create an LLC or other business entity that will provide you with legal protection.