What type of business entity is owned by shareholders?

A corporation is defined as a type of business entity that is owned by shareholders. This structure allows shareholders to invest capital in exchange for ownership interests in the form of shares. One of the main advantages of a corporation is that it provides limited liability protection to its shareholders, meaning that their personal assets are generally protected from the corporation's debts and liabilities.

Shareholders elect a board of directors to manage the corporation, and this board is responsible for making significant business decisions. The ability to raise capital through the sale of shares is a significant advantage for corporations compared to other business structures. Additionally, corporations can exist independently of their owners, which means they can continue to operate even if a shareholder leaves or sells their shares.

In contrast, partnerships and sole proprietorships are owned by individuals or groups of individuals without the same structure. An LLC, or Limited Liability Company, provides some similar protections as a corporation, but its ownership structure does not involve shareholders in the traditional sense, as it can be owned by a small number of members who may also be actively involved in managing the business.