What defines a corporation in the context of business organizations?

A corporation is defined as an organization with ownership represented by shares of stock. This structure allows for a separation of ownership and management, meaning that shareholders can own the company without necessarily being involved in its day-to-day operations. Each share of stock represents a piece of the ownership of the corporation, which can be bought and sold. This characteristic enables corporations to raise capital through the sale of stock, making it possible for them to expand and operate on a larger scale. Additionally, corporations typically enjoy limited liability, meaning that shareholders are not personally liable for the debts and obligations of the corporation beyond their investment in shares.

This differentiates corporations from other types of business organizations like sole proprietorships and partnerships, where the owners have direct responsibility for business liabilities. In a corporate structure, the distinct legal entity provides protections and opportunities that are not available to other forms of business ownership.