A business, owned by stockholders, chartered under state law to conduct a business or other activity.

• A. Proprietorship
• B. Cash Receipts
• C. Current Liabilities
• D. Corporation

Answer: (D)

Recognizing the business form that is owned by stockholders and chartered by the state helps you distinguish a corporation from other structures. A corporation is a separate legal entity from its owners, who own shares of stock. It is formed by filing articles of incorporation with the state, giving it the authority to operate. Because it’s a distinct entity, the owners’ liability is typically limited to their investment, and it can raise capital by selling stock. Governance happens through a board of directors and corporate officers.

Proprietorship is owned by a single person and lacks separate legal status, so it isn’t owned by stockholders nor chartered by the state. Cash receipts are money collected, not a business form, and current liabilities are short-term debts, not a type of business organization.