Which entity is considered a legal separate entity from its owners?

The correct answer is that a corporation is considered a legal separate entity from its owners. This means that a corporation has its own legal identity, distinct from that of its shareholders or owners. As a result, the corporation can own property, enter into contracts, sue, and be sued in its own name. One of the significant advantages of this structure is that the personal assets of the owners (shareholders) are protected from the liabilities and debts of the corporation. They are only liable for the corporation's debts to the extent of their investment in the corporation, which is a crucial factor in encouraging investment and entrepreneurship.

In contrast, partnerships involve two or more individuals managing and operating the business together, where the partners share liability for the debts and obligations of the partnership. A limited liability company (LLC) provides some liability protection similar to a corporation, yet it is not structured as a completely separate legal entity in the same way a corporation is. Lastly, a sole proprietorship is not a separate legal entity; the owner is personally liable for all debts and obligations of the business. Therefore, the corporation stands out for its unique legal status, which provides both benefits and protections not available in other business structures.