You create a user-owned custom entity by using Common Data Service.

Box 1: No

Common Data Service supports two types of record ownership. Organization owned, and User or Team owned. This is a choice that happens at the time the entity is created and can’t be changed.

Box 2: Yes

By combining conditions and actions, you can do any of the following with business rules:

Set field values

Clear field values

Set field requirement levels

Show or hide fields

Enable or disable fields

Validate data and show error messages

Create business recommendations based on business intelligence.