Liability Protection

The corporation is often described as having a juristic or legal personality. This means it is viewed in the eyes of the law as a separate person from its owners, directors or officers. This is the element that provides the liability protections that people often look for when incorporating. The courts genrally uphold the legal separateness of the corporation.

The corporation, as its own legal person, survives all changes in ownership and management. It can live on indefinitely. Because it is recognized as a completely separate "legal person," distinctively different from any other individual, the corporation's assets are kept separate from the assets of any of the stockholders, officers or directors. That means the corporation is not responsible for the debts of the individual, and vise versa.