A corporation is defined as?

A corporation is defined as?

• A. A sole proprietor operating under a DBA
• B. A partnership with shared liability among partners
• C. A temporary venture within an existing company
• D. A separate legal entity owned by shareholders with unlimited life and liability separate from owners

Answer: (D)

Being a corporation means the business is a separate legal entity created by law. It is owned by shareholders and can exist indefinitely, regardless of changes in ownership. The owners have limited liability, meaning they are not personally responsible for the company's debts—the corporation’s obligations are its own. This combination of separate legal status, perpetual existence, and limited liability for owners is what makes a corporation distinct from other business forms. By contrast, a sole proprietorship (even under a DBA) has the owner’s personal liability; a partnership involves partners who share liability; and a temporary project within an existing company is not a separate legal entity.

Being a corporation means the business is a separate legal entity created by law. It is owned by shareholders and can exist indefinitely, regardless of changes in ownership. The owners have limited liability, meaning they are not personally responsible for the company's debts—the corporation’s obligations are its own. This combination of separate legal status, perpetual existence, and limited liability for owners is what makes a corporation distinct from other business forms. By contrast, a sole proprietorship (even under a DBA) has the owner’s personal liability; a partnership involves partners who share liability; and a temporary project within an existing company is not a separate legal entity.