Ans:
Following are a few effects of a separate legal entity -
The entity is separately liable for tax assessment
The entity can sue others or be used for any wrongdoing
It can enter into legally binding Contracts
A minor cannot be a member of a legal entity unless his capacity is only limited to the benefits from the entity
It can open bank accounts in its name
A Separate legal entity inherently has a foreseeable future unless an intention appears to curtail its operation.
Though, the entity cannot be sentenced for precision punishment.
The Directors involved in the wrongdoing may be sentenced to prison and the entity may be penalized with fines.