Final answer:
A corporation's life is unlimited due to the separation of control and ownership, which allows for limited shareholder liability and the capacity to raise funds through the issuing of stocks or bonds.
Step-by-step explanation:
When control and ownership are separated, a corporation's life is unlimited. Incorporation allows entrepreneurs to pursue business while limiting their personal liability and enabling easier access to capital. This separation of ownership from control means that individual shareholders are only accountable for the amount they have invested in the corporation, protecting their personal assets from corporate debts and legal actions.
A corporation is considered a legal entity, distinct from its owners, capable of conducting business, entering into contracts, and even filing for bankruptcy independently. The unlimited life of a corporation refers to its ability to endure beyond the lives of its founders or specific shareholders, due to the ease with which company stock can be transferred amongst individuals without affecting the corporation's continuity or legal standing.
This structure is advantageous not just for limiting liability, but also for fundraising. Corporations can sell stock or issue bonds to finance their operations or future investments, tapping into financial resources that might not be available to sole proprietorships or partnerships. Shareholders thus become partial owners through purchasing stock, and their exposure is limited to the amount they have invested, without extending to their personal wealth.