What feature of a corporation protects individual shareholders from personal liability for corporate debts?

The correct answer is limited liability, which is a fundamental characteristic of corporations that serves to protect individual shareholders from personal liability for the debts and obligations of the corporation. This means that if the corporation incurs debts or is sued, the shareholders' personal assets are generally not at risk; they are only liable for the amount they invested in the corporation.

Limited liability encourages investment in corporations, as it allows individuals to support business ventures without the fear of losing more than their initial investment. Additionally, this feature facilitates the growth of businesses, as it attracts more capital by minimizing personal financial risk for long-term investors.

In contrast, while the corporate veil is related to this concept, it specifically refers to the legal distinction between the corporation as a separate entity and its shareholders, and it can be "pierced" under certain circumstances if the legal protections are misused. Asset partitioning relates to the separation of assets of the corporation from those of its owners, but it does not capture the full essence of the limited liability concept. Equitable shareholding does not directly pertain to liability protection, as it mainly considers the rights and entitlements of shareholders in the distribution of profits.