Which statement describes a partnership?

• A. A business that is completely owned by one person.
• B. A legal arrangement in which two or more people share ownership.
• C. A nonprofit organization.
• D. A franchise agreement.

Answer: (B)

A partnership is a legal arrangement where two or more people share ownership of a business and typically share profits, losses, and management according to an agreed plan. This shared ownership is the defining feature, distinguishing it from other structures. When two or more owners join forces, they pool resources and responsibilities, and decisions are often made together or as defined in the partnership agreement. In contrast, a business owned by a single person is a sole proprietorship, which has one owner. A nonprofit organization operates to fulfill a purpose other than making profits for owners. A franchise agreement involves operating a business under someone else’s brand and system, not shared ownership of the business itself.