The best time to put a partnership agreement in place is at the time of setting up the partnership when relations between the partners are amicable.
Having done so, you should review the agreement from time to time as the partnership evolves to ensure it remains appropriate.
It is often the case that a partnership agreement is not considered until a problem arises. Unfortunately, it’s then usually too late for the terms of a partnership agreement to be agreed by the partners.
If you decide to trade as a partnership then unless you specifically agree otherwise in a partnership agreement your rights and obligations as a partner will be as set out in the Partnership Act 1890 (Partnership Act).
The Partnership Act is only suitable for particular partnerships and in many instances its provisions will not provide the partners with the rights that they wish to have or the level of obligations that they wish their fellow partners to be subject to.