Which legal principle holds that a company is a separate legal entity from its owners?

The legal principle that a company is a separate legal entity from its owners is encapsulated in the concept of the veil of incorporation. This principle signifies that once a company is incorporated, it is treated as a distinct entity in the eyes of the law, separate from its shareholders and directors. This separation means that the company itself has its own legal rights and obligations, can enter into contracts, and can be held liable for its actions independently of its owners.

The veil of incorporation protects the owners from personal liability for the company's debts and obligations, which is a fundamental aspect of corporate law. It maintains that the assets and liabilities of the company are separate from those of the shareholders. This means that a shareholder's investment is limited to the amount they have contributed to the company, safeguarding their personal assets from claims against the company.

While limited liability is closely related to this concept, as it refers to the protection that shareholders have against the company's debts, it is the veil of incorporation that explicitly states the distinction between the company and its owners. The other choices, such as corporate governance and fiduciary responsibility, pertain to management structures and duties within a company but do not primarily address the fundamental legal separation established by incorporation.