Which term describes a form of business owned by many investors who hold shares?

Which term describes a form of business owned by many investors who hold shares?

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

Answer: (C)

Ownership by many investors who hold shares describes a corporation. A corporation is a separate legal entity whose owners are stockholders. Shareholders have limited liability, and the business can raise substantial capital by selling stock, with ownership easily transferable without changing the company. This setup fits the idea of a business owned by numerous investors who hold shares. By contrast, a sole proprietorship is owned by one person with unlimited liability, a partnership involves two or more people sharing profits and liabilities (often without issuing tradable stock), and monarchy is a political system rather than a business form.

Ownership by many investors who hold shares describes a corporation. A corporation is a separate legal entity whose owners are stockholders. Shareholders have limited liability, and the business can raise substantial capital by selling stock, with ownership easily transferable without changing the company. This setup fits the idea of a business owned by numerous investors who hold shares. By contrast, a sole proprietorship is owned by one person with unlimited liability, a partnership involves two or more people sharing profits and liabilities (often without issuing tradable stock), and monarchy is a political system rather than a business form.