Thanks very much.
I just want to clarify that I'm a lawyer in a private practice. I provide advice to Publish What You Pay, but I'm actually speaking in a personal capacity today.
As you rightly say, you start a business.... Imagine you started as a sole proprietor, and then your business runs into trouble and you can't pay all of your creditors. Those creditors can go after your personal assets, including your home, so the CBCA and other corporate law statutes create limited liability to encourage people to enter into business.