Partnerships are business entities formed by two or more individuals who agree to share profits and losses. They are governed by a partnership agreement that outlines the terms of the partnership, including each partner's responsibilities, contributions, and the distribution of profits. There are several types of partnerships, including general partnerships, limited partnerships, and limited liability partnerships, each with different levels of liability and management structure. Partnerships offer flexibility and shared decision-making among partners, making them a popular choice for small businesses and professional practices.
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