Entering into a written agreement is one way to form a partnership; a partnership may be formed through the actions of the partners as they operate the business together. Even if individuals have an agreement that says "we are not a partnership," the law may find that there is a partnership and hold one or more partners liable for some business-related obligation. The simplicity and flexibility in creating a partnership may be one of the main advantages of the partnership as a form of business. However, the disadvantages of simplicity and flexibility must be carefully considered. Although an agreement is not required, without a written agreement, partners cannot determine their rights, duties, obligations, and liabilities, except for what is covered by state law. This is not normally enough, since the law on partnerships is not detailed. This allows partners a great deal of flexibility to structure the business as they would like it. But it leaves many questions unanswered if there is not an adequate written agreement setting out the details. The other main attraction to the partnership as a form of business is partnership tax treatment. From a tax standpoint, the partnership is as straightforward as the sole proprietorship. There is no tax at the partnership level. All tax consequences are passed through to the individual partners. The benefit of this pass-through tax treatment is that there is only one level of tax. The negative side is that if a business is reinvesting profits into non-tax-deductible expenses, the partnership may show taxable income but have no cash. Each individual will have to pay taxes on the taxable income from the partnership reported on the individual's tax return even though no income is