Which type of corporation provides limited liability to its owners?

The correct answer is a limited liability corporation (LLC). An LLC is a distinct legal entity that offers its owners, often referred to as members, protection from personal liability for business debts and claims. This means that if the business were to face legal issues or bankruptcy, the personal assets of the members would typically not be at risk. This structure is particularly appealing for small business owners who want to protect their personal finances while enjoying the benefits of running a business.

In contrast, a sole proprietorship is a business owned and operated by a single individual, who is personally liable for all debts incurred by the business. This means that creditors can pursue the owner's personal assets to satisfy business debts.

A general partnership involves two or more individuals running a business together. In a general partnership, all partners share personal liability for the debts and obligations of the business, leaving personal assets exposed to risk.

A cooperative is an organization owned and operated by a group of individuals for their mutual benefit. While cooperatives can take on various forms, they generally do not provide the same level of liability protection as an LLC, as the members or shareholders may still be personally liable under certain circumstances.

Thus, the limited liability corporation stands out as the correct choice because it uniquely offers the