Separate legal entity distinct from its shareholders

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Reference no: EM133616491

Question: In a sole proprietorship, the business and business owner and other shareholders are liable for any damages and obligations and are responsible against any lawsuit and there is no personal liability protection for them. In incorporation, only the business is responsible for any lawsuit and the owner has personal liability protection and is not liable for any lawsuits. In this case, since Jenny formed the incorporation and because the articles of incorporation were filed, the corporation becomes a separate legal entity distinct from its shareholders and owner. So Jenny has personal liability protection and Office Rentals, Inc. only can sue Good Eats, Inc., not Jenny.

Reference no: EM133616491

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