Corporation

A corporation is a separate entity under the law. It can sue and be sued, does not dissolve upon the death of the owners (shareholders), and is taxed as a separate taxpayer. As long as the corporation follows all state law rules, its stockholders have limited liability. This means that the most that they can generally lose is their investment in the stock. In contrast, sole owners and partners have personal liability for the debts of their businesses. They may have to use personal, nonbusiness assets to pay off a business debt or loss.