A separation between ownership and management is most likely to occur in a
A) sole proprietorship.
B) general partnership.
C) corporation.
D) limited liability partnership.

Question

Quizplus · Accepted Answer

A separation between ownership and management is a defining characteristic of a corporation. In a corporation, shareholders own the company and elect a board of directors to oversee management and make important decisions on behalf of the company. The board of directors then appoints executives to manage the day-to-day operations of the company. In contrast, in a sole proprietorship or general partnership, the owner or partners are directly responsible for the management of the business. In a limited liability partnership, all partners share in the management and have unlimited liability for the partnership's debts and obligations.

A Separation Between Ownership and Management Is Most Likely to Occur