A business arrangement in which two or more persons jointly own a business and share in its profits and losses

• A. Sole proprietorship
• B. Partnership
• C. Corporation
• D. Limited liability company

Answer: (B)

Two or more people owning a business together and sharing its profits and losses is a partnership. The defining feature is joint ownership with a shared financial outcome, which comes from how the partners pool resources and responsibilities. In a partnership, profits and losses flow to the partners based on their agreement, and they typically participate in management as well. This differs from a sole proprietorship, where there is one owner; from a corporation, which is a separate legal entity owned by shareholders and not simply a joint ownership of the business as described; and from a limited liability company, which provides liability protection and flexible taxation but isn’t defined by multiple owners sharing profits and losses in the same traditional sense.