What is the definition of partnership in a business context?

In a business context, the concept of partnership refers to an association of two or more persons or entities who operate a business together as co-owners. This arrangement allows partners to share responsibilities, decision-making, profits, and risks involved in the business venture. Partnerships can take various forms, such as general partnerships or limited partnerships, each with specific legal implications regarding liability and operational control.

This definition emphasizes the collaborative nature of partnerships, highlighting the joint ownership and collective endeavor that distinguish them from other business structures. In contrast to a single owner, which describes sole proprietorships, or informal agreements that may lack formal recognition or legal standing, partnerships are recognized entities that often require a written agreement to outline terms, roles, and responsibilities. Additionally, partnerships differ from a group of investors without ownership since those investors may only provide capital without actively engaging in the management or operations of the business. Thus, the essence of a partnership lies in the mutual intent to manage and operate the business collaboratively.