However, liability is limited to the corporation and offers owners' limited personal liability, which is something that is not found in a sole proprietorship or partnership (Corporation: Definition, Formation, Maintenance, 2012). Furthermore, a corporation is also considered to be a stand-alone entity that has separate tax liabilities; as such, the corporation is responsible for paying corporate taxes on any of the profits the company makes, however, each employee is responsible for paying takes on the money that is paid to them in the form of a salary, commission, or dividend (Lorette, 2012).

Limited liability helps protect an individual's personal assets such as their cars, homes, and bank accounts should said corporation be sued by creditors when it cannot pay its debts and the corporation's assets are seized and sold to recoup money (Corporation: Definition, Formation, Maintenance, 2012). However, if it is determined that the personal and business dealings of a...
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