Williams and Hargrove agreed orally to share profits and losses equally, althoughthey also decided to take no money from the operation for at least four months. No otherarrangements were made, but the business did reasonably well and, after the first four monthshad passed, each began to draw out $500 in cash every week. 

At year-end, they took their financial records to a local accountant so that they couldget their income tax returns completed. He informed them that they had been operating as apartnership and that they should draw up a formal articles of partnership agreement orconsider incorporation or some other legal form of organization. They confessed that theyhad never really considered the issue and asked for his advice on the matter.