An independent legal entity owned by shareholders is called?

• A. Sole Proprietorship
• B. Corporation
• C. Partnership
• D. Demographics

Answer: (B)

A corporation is a separate legal entity from its owners. It can own assets, enter contracts, sue or be sued, and continue to exist regardless of changes in ownership. Ownership is via shares held by shareholders, and their liability is limited to the amount they invested, protecting their personal assets.

This contrasts with a sole proprietorship, where a single person owns the business and is personally liable for its debts. A partnership involves two or more people sharing ownership and liability, often with more direct personal exposure. Demographics isn’t a business form at all—it refers to data about a population, not a type of business entity.