What defines a partnership in a business context?

The definition of a partnership in a business context centers around the concept of co-ownership and shared profits. A partnership involves two or more individuals or entities who come together to conduct business with the goal of making a profit. Each partner typically contributes resources—such as capital, skills, or labor—and, in return, they share in the profits and losses of the business according to the terms established in their partnership agreement.

This collaborative structure creates a legal relationship where the partners have mutual rights and obligations towards each other and the operation of the business. It highlights the importance of cooperation and joint decision-making among partners, differentiating it from other business forms like sole proprietorships, where one individual bears all responsibilities, or corporations, which operate as separate legal entities.

The other options present differing business concepts. An individual conducting business alone does not meet partnership criteria since it involves only one person. A corporation is a distinct legal entity separate from its owners and adheres to different rules than partnerships. An agreement between unrelated parties may describe various forms of business arrangements but does not specifically define the co-ownership and profit-sharing aspect that characterizes a partnership.