What type of business entity is characterized by two or more individuals sharing ownership and profits?

A partnership is a type of business entity where two or more individuals share ownership and profits. In this structure, partners collaborate and contribute their skills, resources, and capital to operate the business together, which leads to a joint responsibility for the management and liabilities. The profits earned by the partnership are typically shared among the partners according to the terms outlined in their partnership agreement, making it a cooperative effort.

This structure also often simplifies the taxation process, as partnerships typically pass profits and losses directly to the individual partners rather than being taxed at the corporate level. This distinctive feature, along with the shared decision-making and combined expertise of multiple partners, underscores the collaborative nature of a partnership. In contrast, the other business entities mentioned, such as sole proprietorships, corporations, and LLCs, have different ownership structures and regulatory guidelines that do not involve the same level of shared ownership and profits among multiple individuals.