How can "entity" be used in a sentence?

Say you were to set a business, and all you did was put out a sign and open the doors to your new business, you are a “sole proprietor” and basically you and the business are the same entity, as in people doing business with “ABC Store” are basically doing business with you, personally.

If you open this business as an S Corporation or C Corporation, the business becomes a separate entity, meaning that business is done with “ABC Inc.” and not really with you, you just own it. The reason for doing this is legalities, if the business gets sued, ABC Inc., being a separate entity, a plaintiff can only go after the assets of the Corp. if they win, where ABC Store, you and the store are the same and they can come after your personal assets, ie house, car, savings, etc. Also, being a separate entity, a Corp. files its own taxes, as if it is it’s own person, because it is a separate entity.

Long explanation but I don’t know how else to explain it. I’m sure there is some non-business or non-legal definition, but I’m not sure.