The legal term for a business owned by two or more people who share profits and management is a partnership.
A partnership arises when people carry on a business together with the aim of making a profit. In a general partnership, the partners commonly share management authority, profits, losses, and responsibility for business obligations. A written partnership agreement usually sets out contributions, voting, profit divisions, duties, and procedures for adding or removing partners.
The major legal distinction is that a general partnership is usually not the same as a corporation. General partners may have unlimited personal liability for the firm's debts, while a corporation generally provides shareholders with limited liability. A sole proprietorship, by contrast, has only one owner. Limited partnerships and limited liability partnerships modify traditional partnership rules by giving some partners limited liability or a different management role.
“Sharing profits” alone does not always settle the question: courts examine the parties’ conduct, agreement, control, and financial relationship. Partnerships also commonly end through dissolution, a partner’s withdrawal, or an agreed winding-up process.