What concept legally separates the members from the company for liability and identification purposes?

The concept that legally separates the members from the company for liability and identification purposes is known as the "Veil of Incorporation." This principle is foundational in corporate law, as it establishes that a corporation is a separate legal entity distinct from its shareholders or members. As a result, the individuals involved have limited liability, meaning they are not personally responsible for the debts and obligations of the corporation beyond their investment in shares or capital.

The Veil of Incorporation allows a company to own property, enter contracts, and sue or be sued independently of its members. This separation is crucial because it protects the personal assets of shareholders from business liabilities, encouraging investment and allowing businesses to operate without risking the personal finances of those involved in the company.

In contrast, while the Corporate Veil is a term often used interchangeably with the concept of limited liability, it refers more specifically to the legal protections that can be lifted under certain circumstances (like fraud or misconduct). Fiduciary Duty pertains to the obligations of loyalty and care that directors and officers have toward the company, and a Shareholder Agreement outlines the rights and responsibilities of shareholders but does not inherently create a separation of liability.