What is a business in which investors pool their wealth for a common purpose and share the profits called?

A business in which investors pool their wealth for a common purpose and share the profits is known as a joint-stock company. This arrangement allows multiple investors to contribute capital to a single enterprise, thereby spreading the financial risk and allowing for larger-scale ventures than an individual might manage alone. Each investor holds shares in the company, and profits are distributed based on the number of shares owned. This model became particularly prominent during the Age of Exploration in the 16th and 17th centuries, facilitating global trade and the establishment of colonies, as it provided a means for financing expensive expeditions.

Partnerships involve a smaller group of individuals working together, sharing both profits and liabilities, but they do not operate on the same scale or structure as joint-stock companies. Cooperatives are businesses owned and operated by a group of individuals for their mutual benefit, emphasizing democratic control rather than profit-sharing among investors. Conglomerates denote large corporations that own a variety of businesses across different industries, but they are not characterized by pooling wealth in a manner that directly ties to shared investment and profit as joint-stock companies.