Limited liability for the owners. Generally, the owners of a corporation can lose no more than the amount they have invested in that corporation. On the other hand, with a sole proprietorship or partnership, an owner could lose not only her or his investment, but could also lose other personal assets as well. In other words, the corporate form of business "shields" the owners from most creditors. This occurs because corporations are considered to be legal entities, separate and distinct from their owners. (Due to their legal entity status, a corporation can sue others, can be sued, and must pay income taxes on its taxable income.)