[Coda]

Originally Posted by Yokuutsu

From what I'm reading, legally, partnerships are the same as sole proprietorships....when it comes to paperwork and liability. So that wouldn't have been a problem. Except their country/state may have different laws.

Here, a partnership is a soleproprietorship just with two people instead of one....and if the business is sued, they can go after one, the others, or both for restitution. It's up to the person suing. -random information-

When it comes to liability, yes. When it comes to paperwork, no. You can run a sole proprietorship without filing any paperwork beyond a Schedule C with your taxes.

If they had never filed any paperwork, then there's no partnership with which to own or divest assets. That does imply the part about who to sue that you brought up, but it also implies complications (which could result in a lawsuit in and of itself -- a divorce is, itself, such a suit) pertaining to who actually owns what when the partners disagree.