A legal entity owned by its shareholders is known as a "corporation".
A corporation is a type of business structure that is owned by its shareholders, who are individuals or other businesses that hold shares of the company's stock. The shareholders provide capital to the corporation in exchange for ownership rights, such as the right to vote on major decisions and the right to receive a portion of the company's profits in the form of dividends.
One of the key advantages of the corporate structure is that it provides limited liability to the shareholders, which means that their personal assets are generally protected from the debts and liabilities of the corporation. This helps to encourage investment in the company and can make it easier for the corporation to raise capital.
Corporations are typically created by filing articles of incorporation with the state in which they are headquartered. They are governed by a board of directors, which is elected by the shareholders and responsible for making major business decisions on behalf of the corporation.