What type of business is a corporation?

A corporation is defined as a business entity that is legally separate from its owners, meaning it is owned by stockholders. This separation gives the corporation certain legal benefits, such as limited liability, which protects the personal assets of the owners (stockholders) from being used to satisfy the corporation's debts. Additionally, corporations can raise capital by selling shares of stock to the public, allowing them to expand and grow its operations effectively.

In contrast, a sole proprietorship is owned and operated by a single individual, while a partnership involves two or more individuals who share ownership and responsibilities. Non-profit entities exist primarily to fulfill a charitable mission rather than to generate profit for owners or stockholders. Therefore, the defining characteristic of a corporation being owned by stockholders distinguishes it clearly from these other forms of business ownership.