How is a partnership best described?

A partnership is best described as an association of two or more people operating the business as co-owners because this definition captures the essential elements of what constitutes a partnership. Partnerships are characterized by the collaboration between individuals who share responsibilities, profits, and losses of the business. Each partner contributes resources and shares in the decision-making process, making it a joint effort rather than a single person's endeavor. This collaborative nature differentiates partnerships from sole proprietorships, which involve only one owner.

In a partnership, the partners may have varying degrees of involvement and investment in the business but are bound by a mutual agreement that outlines their roles, contributions, and distribution of profits. This structure facilitates pooling of skills, resources, and contacts, enhancing the business's potential for success.

The other choices inaccurately represent partnerships: a sole ownership entity refers specifically to sole proprietorships, not partnerships; a partnership can indeed have multiple owners, contrary to the suggestion in another option; and although personal liability can vary in certain types of partnerships, it is not generally limited to business expenses alone as suggested in one of the choices. Thus, the correct description is that a partnership consists of two or more co-owners.