Which business form is owned by two or more people and shares profits and losses?

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

Answer: (A)

Two or more people owning and sharing profits and losses describes a partnership. In a partnership, multiple owners come together to run the business and agree how profits and losses are split, usually laid out in a partnership agreement. This shared ownership and joint liability for outcomes is what sets it apart from other forms: a corporation is owned by shareholders and distributes profits as dividends, with liability typically limited to the investment; a franchise is a licensing arrangement to operate under a brand rather than a specific form of ownership; and a sole proprietorship is owned by a single person who bears all profits and losses alone.