What best describes a general partnership?

A general partnership is characterized by a business arrangement where two or more individuals come together to manage and operate a business with shared responsibilities, profits, and liabilities. In this type of partnership, all partners are actively involved in the management and operations of the business and have equal authority in decision-making, unless otherwise agreed upon. Each partner also shares the financial gains and losses of the business. This collaborative approach can promote a wide range of skills and resources within the partnership.

The other options describe different types of entities or arrangements. A general partnership does not function as a legal entity that limits personal liability; instead, partners typically have unlimited liability for the debts of the partnership. A social club focuses on networking rather than business management. Lastly, a corporate structure with shareholders represents a completely different legal entity type, which provides limited liability but operates under different governance and financial structures than a partnership. Understanding these distinctions is essential for recognizing the operational and legal frameworks of business entities.