DECA Sports and Entertainment Marketing Practice Exam

What is a partnership in a business context?

1. A business owned by one individual

2. A corporation that issues public shares

3. An agreement between two or more individuals to own and operate a business together

4. A sole proprietorship with multiple employees

The correct answer is: An agreement between two or more individuals to own and operate a business together

In a business context, a partnership refers to an arrangement in which two or more individuals collaborate to own and operate a business together. This structure allows partners to share the responsibilities, resources, profits, and liabilities of the business. Partnerships can take various forms, such as general partnerships and limited partnerships, which dictate the level of responsibility and involvement each partner has in the operation of the business. This collaborative approach can benefit partners by combining their skills, expertise, and capital, ultimately enhancing the potential for business success. The other options describe different types of business structures. A business owned by one individual is known as a sole proprietorship, which does not involve multiple owners. A corporation that issues public shares is a separate legal entity from its owners, allowing for public investment and structured governance that does not apply to partnerships. Lastly, a sole proprietorship with multiple employees describes a single owner running a business with staff, which also does not encompass the shared ownership aspect central to partnerships.