What term refers to a business that is legally treated as a person, yet remains separate from its owners?

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

Answer: (A)

Corporation is a business entity recognized by law as a separate legal person from its owners. This separation means the entity can own assets, enter contracts, sue or be sued, and continue beyond the involvement of any one owner. Owners (shareholders) typically have limited liability, meaning their personal assets aren’t at risk for the company’s debts beyond their investment. This distinguishes it from a sole proprietorship, where the owner and business are the same, and from a partnership, where liabilities and governance are tied more directly to the individuals involved. A franchise is a business model rather than a specific legal form, though a franchise can operate under a corporate structure.