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A company is a legal entity formed by a group of individuals to engage in commercial activities. It is an organization established under the laws of a specific country and possesses its own legal rights and obligations. Companies exist separately from their owners, which means they can own property, enter into contracts, sue, and be sued in their own name. In essence, a company is a form of business structure that is distinct from its founders or shareholders. One of the defining characteristics of a company is that it is a separate legal entity from its owners. This means that the company can act as an independent entity with its own rights, duties, and liabilities. The legal distinction between the company and its owners protects the shareholders from personal liability, meaning they are not personally responsible for the company’s debts beyond the amount they have invested in shares. This principle is called the "limited liability" of the shareholders, which is one of the primary reasons why companies are preferred over other business structures like sole proprietorships and partnerships, where owners are personally liable for debts. Another characteristic of a company is its ability to raise capital by issuing shares. These shares represent ownership interests in the company. The shareholders are the owners of the company, and their shareholding proportion ______ ______ _________ __________ _________ ______.
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