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Separate Legal Entity

Some Business entities like corporation, LLC can exist separately from its owners. In a common language that a corporation is a separate entity of its owners and corporation itself is an entity like human being created through legal or official process.

Corporation lives and does its activities at its own existences and is treated in its own capacity. It does the business, it generates the revenue, it can incur losses, it hires the employees and it pays its own taxes.

It is a better form of existence for the reason it takes its responsibilities itself, owners are free from their personal liabilities and owners enjoy limited personal liability (risk) only up to their investments in stocks, though there may be certain situations where their personal responsibilities can exceed from limited liability concept.

Separate Entity Concept is better choice and it has better features because corporation enjoys separate entity concept, has indefinite life (perpetual). Management and ownership may change but corporation will exist indefinitely at its own existence, unless it is officially dissolved or merged.

Corporation has a better scope for large & multiple businesses, expending business, securing debts, attracting investors, retaining professional setup and engaging professional management, promoting & achieving new ideal, expanding its activities at local to global level.

Under Separate Entity Concept, Corporation is treated in its own capacity, but it is not a human being, it is an artificial being, therefore, it has to be managed by people in different capacities such as owners, directors, managers or employees, those are supposed to work ethically and represent it in their vested authorities. Corporation seal is used for corporation signature on important and legal documents.