Final answer:
The legal relationship in which one person permits another to act on his or her behalf in business and legal matters is known as Agency. It differs from a Partnership which involves shared ownership and responsibilities among stakeholders.
Step-by-step explanation:
The legal relationship created when one person allows another to represent him or her in business and legal matters is called Agency. This is a construct in which the agent is allowed to act on behalf of the principal for certain business activities, which may involve entering into contracts or making business transactions.
This relationship is different from a Partnership, where two or more individuals share the ownership and responsibilities of a business. Agency does not entail shared ownership or liability as in a partnership. It is important to understand this distinction when considering different business structures and their respective benefits and liabilities.