Which form of business ownership is characterized by stockholders owning shares of the company?

A corporation is characterized by stockholders who own shares of the company. This means that ownership is divided into shares of stock, and individuals can buy and sell these shares. As shareholders, they have a claim on the company’s assets and earnings proportional to their ownership stake.

Furthermore, the structure of a corporation allows for formal management and a board of directors to oversee operations, which can offer investors a level of security and limited liability—meaning they are typically not personally responsible for the debts and liabilities of the company. This differs from other forms of business ownership, such as sole proprietorships and partnerships, where personal assets may be at risk. An LLC, or Limited Liability Company, also provides limited liability but does not issue stock in the same way that corporations do. Overall, the key feature of stock ownership in a corporation directly distinguishes it from these other business structures, making it the correct choice.