What is a corporation?

A corporation is defined as a group authorized to act as a single entity, typically recognized by law as a separate legal entity from its owners. This means that the corporation itself can own assets, incur liabilities, and enter into contracts independently of its shareholders. One key characteristic of a corporation is that it can raise capital by issuing stock, allowing it to share ownership among multiple investors. This structure provides limited liability protection to its shareholders, meaning their personal assets are generally protected from the corporation's debts and liabilities.

The other choices describe different forms of business organizations but do not capture the essence of what a corporation is. For instance, a business owned by one person refers to a sole proprietorship, which does not have the legal distinction that a corporation does. Sharing profits may pertain to partnerships or certain types of corporations but doesn't accurately define a corporation itself. Additionally, characterizing a corporation as a type of sole proprietorship is misleading, as sole proprietorships are, by definition, owned and operated by a single individual without the formal structure or separate legal status of a corporation.