What is the term for a legal entity in which two or more persons agree to share profits and losses?

The term for a legal entity in which two or more persons agree to share profits and losses is a partnership. This type of business structure allows individuals to collaborate, pooling their resources, skills, and capital to operate a business together. Partnerships are characterized by a shared responsibility for the management of the business and the obligations that come with it, including the distribution of profits and losses based on the agreement between the partners.

In a partnership, the partners typically have a formal agreement that outlines each party's contribution, roles, and the method for sharing profits and losses. This arrangement enables individuals to leverage their strengths and work cooperatively, fostering a sense of teamwork while also allowing for the flexibility to manage the business efficiently.

Other business structures like corporations and LLCs have different implications for liability, taxation, and management, and a sole proprietorship consists of a single individual operating the business independently. Each of these structures serves distinct purposes and offers various advantages and challenges, but for the specific definition of sharing profits and losses among two or more people, a partnership is the clearly defined choice.