A business that has one or more owners, usually known as members, who may be individuals or corporations, is categorized as what type of entity?

The correct choice is the limited liability company (LLC). An LLC is specifically designed to provide the flexibility of a partnership while offering the liability protection that comes with a corporation. It can have one or more owners, termed members, which can be individuals or other business entities such as corporations. This structure is particularly popular among small business owners who want to limit their personal liability for business debts and legal obligations while still enjoying the benefits of operational flexibility.

In contrast, a partnership involves two or more individuals or entities who manage the business and remain personally liable for its debts, which does not offer the same level of protection as an LLC. A sole proprietorship is owned by a single individual who is personally responsible for all liabilities, and a corporation is a more complex structure that involves shareholders and is treated as a separate legal entity, often requiring more formalities and regulations compared to an LLC. Thus, the unique characteristics of an LLC align directly with the description provided in the question.