**Step 1 — Recall the definition of a prime number.**
A prime number has **exactly two** distinct positive factors — $1$ and itself.

**Step 2 — Recall the definition of a composite number.**
A composite number has **more than two** positive factors.

**Step 3 — Check the factors of 1.**
$1$ has only **one** factor, namely $1$ itself.

Hence $1$ is neither prime nor composite. (This is also why the Fundamental Theorem of Arithmetic excludes $1$.)

**Answer : (D) neither prime nor composite**