Corporations allow individuals and groups to create a new entity for the purpose of doing business. The corporation shields its creators from liability beyond their investment. If the business goes bad, the corporation takes the fall, not the shareholders. The incorporators may lose their investment in the company, but they do not usually lose their personal belongings. Because the incorporators are protected from complete financial ruin, they are more likely to take calculated business risks. This in turn encourages economic growth and prosperity. Disappearing Act From a creditor's perspective, however, corporations can sometimes be used to accomplish an injustice. Such seemed to be the case in Statesville Stained Glass, Inc. v. Lane Construction, recently decided by the North Carolina Court of Appeals.
