Final answer:
A corporation is distinguished by being a legal entity with limited liability for its shareholders, and the ability to raise capital by issuing stock and bonds. It can exist indefinitely, separate from its owners, and has potential for name recognition.
Step-by-step explanation:
A corporation is a legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Corporations are allowed to enter into contracts, sue and be sued, own assets, remit federal and state taxes, and borrow money from financial institutions. The three characteristics of a corporation are: It is a legal entity that is separate from its owners, with the rights and responsibilities to sue and be sued, enter into contracts, and file for bankruptcy.
Limited liability for shareholders, meaning that owners are not personally responsible for the corporation's debts and legal actions. Ability to raise capital through the issuance of stock and corporate bonds, thereby allowing for easy transfer of ownership and potentially attracting investment. A corporation can also have an unlimited life, hire professionals to represent it, and may have name recognition that adds to its credibility and market presence.