With starting a business, what tax considerations might cause you to prefer to set it up as a proprietorship or a partnership rather than as a corporation?

Business Dec 09, 2020

Expert Solution

Double taxation: Corporations pay taxes on the income earned from their operations. After that, the shareholders are also taxed on the dividends paid to them by the corporation from the profits gained.
The dividends paid to stakeholders are not tax-deductible from the income. This is disadvantageous to the corporation.
Excessive filing of tax: Corporations are involved in the payment of a wide range of taxes and earns several kinds of income. Because of this, they have a considerable mass of paperwork that is not needed by either partnership or sole proprietorship.

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