When a company is incorporated it becomes a separate legal entity from its owners
Any legal relationship that is entered into by a company is similar to that established by an individual and is enforceable in court
As a separate legal entity, a company has many of the rights, duties and responsibilities of a person
The owners of a company are called shareholders because their ownership is represented by shares in the company‟s capital. Each share represents a percentage share of the ownership of the company. The number of shares each shareholder holds, as compared to the total number issued will determine the share holders total ownership.