Which of the following best describes a Stock Company?

A stock company is a type of insurance company that is owned by its stockholders, who may or may not be policyholders. The primary characteristic of a stock company is its structure, where it issues shares of stock to investors. Profits generated by the company are typically distributed among these stockholders in the form of dividends. This aligns with the financial model of stock companies, which aim to generate profit for their investors, making the sharing of profits a central part of their operation.

In contrast, other options present characteristics of different types of companies. For example, being owned by policyholders describes a mutual insurance company, which operates under a model focused on serving its members rather than generating profit for stockholders. Non-taxable dividends are associated more with mutual companies as well, rather than stock companies. Additionally, mutual organizations do not operate on a stockholder basis, which further delineates them from stock companies. Therefore, the description that aligns best with a stock company is the one that highlights the profit-sharing among stockholders.