What is a partnership?

A partnership is classified as a business structure wherein two or more individuals come together to share ownership and management responsibilities. This form of organization allows partners to collaborate and combine resources, skills, and expertise to run a business. Unlike a corporation, a partnership does not operate as a separate legal entity, which means that the partners are personally liable for the business's debts and obligations. This shared ownership aspect is fundamental to partnerships, emphasizing cooperation among partners in decision-making and profit-sharing.

In contrast, a corporation provides liability protection and operates as a separate legal entity, which is why that choice does not apply. A partnership cannot be a single-owner business since it requires multiple individuals to be classified as such. Lastly, a partnership is distinct from a corporation, as it does not have the structured regulatory framework that governs corporations. Therefore, the essence of a partnership lies in the collaborative effort of multiple individuals who jointly manage and own the business.