Which statement best describes a municipal corporation?

A municipal corporation is indeed created by special law to serve as a governing entity for a specific local government unit, such as a city, town, or village. These corporations are established through a legislative process and have the authority to enact local ordinances and regulations, collect taxes, and provide public services to their communities, such as water, sanitation, and public safety. This creation through special law distinguishes municipal corporations from other types of organizations, as it underscores their role in local governance and public administration.

The other options do not accurately reflect the primary function and creation of a municipal corporation. While some might perform functions that appear commercial in nature, their primary purpose remains public service, not commercial operation, which is clearer in the first answer. Thus, the distinction of being created specifically for local governance underlines the unique role municipal corporations hold in the framework of local government.