The corporate entity owns its own assets and is responsible for its own debts. The shareholders of the shares are considered the legal owners of the company. However, they are not responsible for the debts and taxes of the corporation.
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What makes a legal entity?
A legal entity is any company or organization that has legal rights and responsibilities, including tax returns. It is a company that can enter into contracts as a seller or supplier and can sue or be sued in a court of law.
Is a sole proprietorship a legal entity?
A sole proprietorship is not a separate legal entity, but is considered an extension of the owner. But you can trade under a trade name, such as “Bob Smith Plumbing”.
