Debts of a corporation are not the debts of the persons running the corporation or owning shares of stock in it.

Question

Quizplus · Accepted Answer

This is one of the key legal principles of the corporate form of business. Shareholders and managers are not personally liable for the debts of the corporation, except in certain limited circumstances where they have engaged in fraudulent or illegal conduct. This limited liability protection is one of the key advantages of incorporating a business.

Debts of a Corporation Are Not the Debts of the Persons