Which form of business ownership limits the liability of its owners to their investment in the company?

A corporation is a form of business ownership that limits the liability of its owners, who are typically shareholders, to the amount they have invested in the company. This means that if the corporation incurs debts or faces legal issues, the personal assets of the shareholders are generally protected and cannot be used to satisfy those liabilities beyond their investment in the stock.

This characteristic of limited liability is one of the primary reasons why individuals choose to invest in corporations; it allows them to take part in the business's success without risking their personal financial security. In a corporation, the company itself is considered a separate legal entity from its owners, which reinforces this protection.

Other forms of business ownership, such as partnerships and sole traders, do not offer this level of protection. In those structures, the owners can be personally liable for the debts of the business, meaning that their personal assets may be at risk if the business fails or faces legal challenges. A cooperative, while it may offer some benefits to its members, also typically does not limit liability in the same way that a corporation does.