Which business entity is most associated with raising capital by issuing shares?

• A. Partnership
• B. Corporation
• C. Sole proprietorship
• D. LLC

Answer: (B)

Raising capital by issuing shares is a hallmark of corporations. A corporation is a separate legal entity that can sell stock to investors, allowing it to raise substantial funds while spreading ownership among many shareholders. Shares provide liquidity and transferability, which makes it easy to attract large amounts of capital from the public or private investors.

Other business forms don’t issue shares in the same way. A partnership is owned by the partners and typically funds growth by adding partners or through loans. A sole proprietorship is owned by one person and relies on the owner's funds or borrowing. An LLC uses membership interests to allocate ownership and capital rather than traditional stock shares, though it can raise money by admitting new members or through debt or other instruments. Because stock issuance is specific to corporations, this form is the best fit for raising capital by issuing shares.