Which business form is governed by a board of directors?

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Multiple Choice

Which business form is governed by a board of directors?

In a corporation, ownership is separated from management, and governance is carried out by a board of directors elected by the shareholders. This board sets broad policies, approves major actions, and hires officers to run day-to-day operations. That structured board oversight is a hallmark of corporations, especially C corporations. Other forms—sole proprietorships and partnerships—are typically run directly by the owners or partners without a formal board. An LLC, while it can have managers or members directing affairs, does not inherently rely on a board of directors in the same way a corporation does. Hence, the business form governed by a board of directors is the corporation.

In a corporation, ownership is separated from management, and governance is carried out by a board of directors elected by the shareholders. This board sets broad policies, approves major actions, and hires officers to run day-to-day operations. That structured board oversight is a hallmark of corporations, especially C corporations. Other forms—sole proprietorships and partnerships—are typically run directly by the owners or partners without a formal board. An LLC, while it can have managers or members directing affairs, does not inherently rely on a board of directors in the same way a corporation does. Hence, the business form governed by a board of directors is the corporation.

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