Which business form is characterized by investors called stockholders and ownership measured in shares of stock?

Which business form is characterized by investors called stockholders and ownership measured in shares of stock?

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

Answer: (A)

Ownership described as investors being stockholders and ownership measured in shares of stock points to a corporation. Here, the business is a separate legal entity, and ownership is divided into shares of stock. Each stockholder owns a portion of the company proportional to the number of shares they hold, and these shares can be bought or sold, allowing ownership to change hands easily while the company raises capital by issuing stock. Stockholders typically have limited liability, meaning they aren’t personally on the hook for the company’s debts beyond their investment. This setup contrasts with sole proprietorship (one owner with unlimited liability), partnership (two or more owners with shared liability), and cooperative (owned by members who use the cooperative’s services, often aligning with patronage rather than stock-based ownership).

Ownership described as investors being stockholders and ownership measured in shares of stock points to a corporation. Here, the business is a separate legal entity, and ownership is divided into shares of stock. Each stockholder owns a portion of the company proportional to the number of shares they hold, and these shares can be bought or sold, allowing ownership to change hands easily while the company raises capital by issuing stock. Stockholders typically have limited liability, meaning they aren’t personally on the hook for the company’s debts beyond their investment. This setup contrasts with sole proprietorship (one owner with unlimited liability), partnership (two or more owners with shared liability), and cooperative (owned by members who use the cooperative’s services, often aligning with patronage rather than stock-based ownership).