What is a partnership?

A partnership is defined as a business arrangement in which two or more individuals co-own and operate a business together. This structure allows the partners to share in both the profits and the responsibilities of running the enterprise. It is distinct from sole proprietorships, where a single individual owns the business, and it involves a legal agreement that outlines the rights, responsibilities, and contributions of each partner.

This definition highlights the essential collaborative nature of partnerships, making it clear that a partnership cannot exist with just one owner, as would be the case in a sole proprietorship. Additionally, partnerships are fundamentally different from corporations, which are legal entities that provide liability protection to their owners and have a more complex structure regarding ownership and governance. A franchise agreement is a contractual arrangement between the franchisor and franchisee but does not specifically relate to the concept of a partnership.

Thus, option B accurately encapsulates the essence of a partnership as a business owned by multiple individuals working together.