What is separate legal existence?

Separate legal existence refers to the concept that a corporation or legal entity is distinct from its owners or shareholders. This means that the entity can own property, incur debts, and enter into contracts in its own name, independent of its owners. As a result, the owners are generally not personally liable for the entity’s obligations, protecting their personal assets from business liabilities. This principle is fundamental to corporate law and underpins the operations of businesses structured as corporations or limited liability companies.