Which business structure involves two or more owners sharing profits and responsibilities?

Which business structure involves two or more owners sharing profits and responsibilities?

• A. Franchise
• B. Sole proprietorship
• C. Partnership
• D. Corporation

Answer: (C)

In this setup, two or more people own the business together and share both the profits and the day-to-day responsibilities of running it. That shared ownership and shared management is the hallmark of a partnership, usually guided by a partnership agreement that spells out how profits, losses, and duties are split. A franchise, by contrast, isn’t defined by how many owners share control; it’s a license to operate a proven brand and system, and ownership can be a single person or a larger entity. A sole proprietorship is owned by one person, who keeps all profits and handles all responsibilities alone. A corporation is a separate legal entity owned by shareholders, with control typically through a board and officers, and profits distributed via dividends or reinvested rather than directly shared in a simple partnership-style arrangement.

In this setup, two or more people own the business together and share both the profits and the day-to-day responsibilities of running it. That shared ownership and shared management is the hallmark of a partnership, usually guided by a partnership agreement that spells out how profits, losses, and duties are split.

A franchise, by contrast, isn’t defined by how many owners share control; it’s a license to operate a proven brand and system, and ownership can be a single person or a larger entity. A sole proprietorship is owned by one person, who keeps all profits and handles all responsibilities alone. A corporation is a separate legal entity owned by shareholders, with control typically through a board and officers, and profits distributed via dividends or reinvested rather than directly shared in a simple partnership-style arrangement.