What term describes the legal structure where ownership is divided among shareholders?

The correct term that describes the legal structure where ownership is divided among shareholders is a corporation. In a corporation, the entity is separate from its owners, which allows for ownership to be distributed in the form of shares. Each shareholder owns a portion of the corporation proportional to the number of shares they hold, granting them rights to vote on certain corporate matters and receive dividends if the corporation distributes profits. This structure provides limited liability to shareholders, meaning their financial risk is generally limited to their investment in the shares and not their personal assets.

In contrast, a partnership involves two or more individuals sharing ownership and responsibilities of a business, which does not typically result in the division of ownership into shares. A sole proprietorship is owned by a single individual and does not involve multiple owners or shareholders. A cooperative is owned and operated by a group of individuals for their mutual benefit, but unlike a corporation, it does not operate on the basis of shareholder ownership but rather on a member-ownership model where each member usually has one vote, regardless of investment size. This distinction makes the corporate structure unique in its division of ownership and the legal protections it offers to shareholders.