Final answer:
The form of business organization characterized by limited liability is a corporation, where shareholders have protection from personal liability beyond their investment in the company.
Step-by-step explanation:
The legal form of organization characterized by limited liability is a corporation. Unlike sole proprietorships and general partnerships where the owners are fully liable for the debts and obligations of the business, a corporation provides a shield from personal liability for its shareholders. A corporation is considered a separate legal entity, and shareholders are not typically responsible for the debts of the business beyond their investment in the company's stock.