Which form is a distinct legal entity created under state law, capable of owning property and suing or being sued?

• A. Corporation
• B. Cooperative
• C. Sole Proprietorship
• D. General Partnership

Answer: (A)

A corporation is created under state law as a separate legal entity with its own rights and duties. This distinct legal personality means it can own property in its own name and sue or be sued, independently of its shareholders or managers. That separation also provides limited liability for owners and allows the entity to continue beyond the life of any individual owner, which is why this form is used for businesses that need to own assets and engage in legal actions without exposing personal assets. By contrast, a sole proprietorship has no separate legal personality—the owner and the business are the same, so personal assets can be at risk and property is legally tied to the individual. A general partnership generally involves partners who share liability and may not offer the same clear, ongoing legal identity as a corporation. A cooperative is owned by its members and can be organized as a corporation or cooperative association, but the explicit concept described fits the distinct legal entity structure of a corporation.