Who owns a C corporation?

• A. The management team
• B. Shareholders
• C. The founders
• D. The government

Answer: (B)

A C corporation is a legal entity that is separate from its owners, and it is owned by shareholders. Shareholders invest capital into the corporation by purchasing shares of stock, which entitles them to a portion of the corporation's assets and earnings. The overall governance and decisions of the corporation are typically directed by a management team, which is appointed by the shareholders. While founders may initially hold shares and therefore own part of the corporation, ownership can change hands as shares are bought and sold. The government does not own the corporation but regulates it and holds it accountable for compliance with business laws and tax regulations. Therefore, the characterization of shareholders as the owners of a C corporation accurately reflects the structure of corporate ownership in accordance with generally accepted accounting principles.