What is a partnership?

A partnership is defined as a business structure where two or more individuals come together to operate a business with the intention of sharing profits and liabilities. This collaborative approach allows partners to pool resources, knowledge, and skills to achieve common business goals. In a partnership, each partner typically contributes to the business in various capacities, whether through financial investment, expertise, or labor, and they share in the profits generated by the business as well as in the responsibilities and liabilities that come with its operations.

This definition distinguishes partnerships from other business structures, such as corporations or sole proprietorships. A corporation is a distinct legal entity owned by shareholders, while a sole proprietorship is owned by a single individual, lacking the shared ownership characteristic found in partnerships. Understanding these distinctions is crucial for anyone studying business structures in Indiana or elsewhere.