In relation to a corporation, why is it organized this way? What are the benefits and drawbacks to owners? Employees?

In relation to a corporation, why is it organized this way? What are the benefits and drawbacks to owners? Employees?

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...e owners and employees a layer of liability protection that neither sole proprietorships nor partnerships have. An investor in a corporation has limited liability to the extent of his investment only. A shareholder cannot normally be sued for acts of the corporation.

To a large extent, that liability protection also extends to employees of the corporation although there are some situations where outsiders can 'pierce the corporate veil', as it is called. This term means that if employees and/or shareholders do not treat the entity as separate from themselves, an outsider could say that the corporation ...