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Microsoft Entra B2B (external identities) is designed to let an organisation:
AReplace Entra ID with an on-premises domain controller
BBlock all external users from ever signing in
CInvite users from outside its own tenant (e.g. partners, contractors) to access shared resources using their existing work or personal identity
DForce all internal users to sign in with a personal Microsoft account
Answer & Solution
Correct answer: C. Invite users from outside its own tenant (e.g. partners, contractors) to access shared resources using their existing work or personal identity
B2B (Business-to-Business) collaboration invites guest users into your tenant — they sign in with their home credentials (another Entra tenant, Google, etc.) and you grant them access to your shared resources. The other options describe a block, a reversal, or a different product entirely.
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