partnership
Definition
A partnership is a business arrangement where two or more people agree to run a business together and share the profits, losses, and responsibilities. Unlike a corporation, a partnership does not create a separate legal entity, which means the law treats you and your business as the same thing.
Example
If you and a friend open a bakery together, split the costs, share the profits, and both have a say in how things are run, you have formed a partnership even if you never signed a formal agreement.
Watch Out
Each partner can be held personally responsible for the debts and mistakes of the other partners, so if your partner takes out a loan or causes harm to someone, your personal savings and assets could be on the line.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.