Final answer:
A business regarded as a distinct legal entity is known as a corporation, which protects its owners from personal liability for the company's debts and is treated as a legal "person." Sole proprietorships, general partnerships, limited partnerships, and unlimited liability companies do not provide the same distinct legal entity status.
Step-by-step explanation:
A business created as a distinct legal entity and treated as a legal "person" is typically known as a corporation. This legal structure provides the company with the ability to perform many of the actions that individuals can, such as entering into contracts, borrowing money, owning assets, employing staff, and being accountable for its liabilities. The options a) Corporation, b) Sole proprietorship, c) General partnership, d) Limited partnership, and e) Unlimited liability company represent different business structures. Here we address each in relation to the question:
- a) Corporation: True - A corporation is a distinct legal entity often chosen to protect the individual owners from personal liability for the company's debts and actions.
- b) Sole proprietorship: False - A sole proprietorship is not considered a distinct legal entity; instead, it is one individual who owns the business and is personally responsible for its debts.
- c) General partnership: False - Similar to a sole proprietorship, a general partnership involves two or more individuals who own a business together and are personally liable for its debts.
- d) Limited partnership: False - While a limited partnership has elements of limited liability for some partners, it's not a separate legal entity in the same manner a corporation is.
- e) Unlimited liability company: False - An unlimited liability company implicates its owners (shareholders) directly for the company's debts, different from a corporation's liability structure.
Most private companies are small and may operate as sole proprietorships or partnerships, but large private corporations also exist and are influential in the marketplace.