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the corporation is an organization usually a large business with specific characteristics under law corporations are deemed separate legal entities from their owners this means that corporations themselves not the owners are legally liable for their actions and debts if a corporation incurs debts creditors have claims against the assets of the corporation not the personal assets of the owners this is called limited liability and is a major corporate advantage Joe's lawn and garden is not a corporation Joe and ten other people are owners who share the profits the company is sued for five hundred thousand dollars but the company only has three hundred fifty thousand dollars in assets all ten of the owners must dig into their personal assets to pay off the remaining 150 thousand dollars now instead let's say Joe's lawn and garden became a corporation the year before and is now called Joe's lawn and garden incorporated the company is sued for five hundred th

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