Which form of business typically has perpetual existence and is separate from its owners, with the ability to issue shares?

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

Answer: (A)

A corporation is the form that fits these features. It exists as a separate legal entity from its owners, so it can own property, enter contracts, and be sued in its own name. Because the entity is independent of its shareholders, it can continue to operate indefinitely even if ownership changes or shareholders come and go. It also has the ability to raise capital by issuing shares of stock, transferring ownership through those shares. This combination—being a distinct entity, having potentially perpetual life, and issuing shares to investors—is not typically found in partnerships or sole proprietorships, where life and control are tied more directly to the individuals involved. A franchise, meanwhile, is a licensing arrangement and not a specific form of business entity, though it can be operated as a corporation or other legal form if chosen.