When it comes to legal entities, they have to be specific. F'r instance ...
Say you have a firm set up with three directors - Mr Jones, Mrs Jones (his wife), Mr Goose (his brother in law). When it comes to legal responsibilities, it doesn't matter that they are all related. They are down, on record, as being individuals controlling the firm.
Now, you have company assets paid using company cash, yes, but how those assets are assigned is important. All three agree to spend company money to buy each of them luxury cars. The company own all three but they may be given to each director as a bonus, gift, whatever. The company now doesn't own them, but are assets of the three directors.
Say Mr Jones is caught in a financial scam and his assets seized. This won't affect the company balance sheet - he is a director, not an owner or sole proprietor. Neither will his wife not his BiL be affected; their assets are their own. So, you still have two directors practically owning the firm. Once his assets are taken, his wife or BiL can gift him a new car. He can't hold a directorship ... but he can be employed by the firm in another capacity, such as 'consultant' and he could, in theory, be paid the same salary as before.
My mum used to say "two cars on the drive but bugger all in the 'fridge" to denote sham status signalling. But it works in business too. It might have cold, hard assets on it's balance sheet but to actually realise those assets is another matter. You can factor in depreciation but, essentially, the balance sheet is a snapshot of value of the company - not actual cash flow potential. You could hold a warehouse full of stock worth thousands, but that stock needs to be sold for that cash to be realised. It's potential money, not real money.
Now, of course I'm talking about a small enterprise, with few independent shareholders but, in larger cases, the opportunity for shenanigans increase exponentially.
