What type of business does not possess a separate legal identity from its owner, making them fully liable?

• A. Partnership
• B. Incorporated business
• C. Unincorporated business
• D. Sole proprietorship

Answer: (C)

A business that does not possess a separate legal identity from its owner is often referred to as an unincorporated business. In such a structure, the business and the owner are legally the same entity, which means that the owner is personally responsible for all the debts and liabilities incurred by the business. This lack of a distinct legal identity places the owner at significant financial risk, as their personal assets could be at stake if the business faces legal issues or insolvency.

In contrast, incorporated businesses, such as corporations, are separate legal entities, which helps to protect the owners' personal assets from business liabilities. Similarly, sole proprietorships, while they are unincorporated and have the owner personally liable, are specifically defined as single-owner ventures. Partnerships also involve shared liability among partners and don’t have a separate legal identity. Therefore, the term "unincorporated business" broadly encompasses various forms of business, including sole proprietorships and partnerships, where owners face full liability for business obligations.