Corporation

It is an autonomous legal body distinct from its owners and, as such, needs further legislation and tax provisions to be complied with. Under the laws of each State, corporations are established with their range of rules. Company owners pay double income tax on the firm. Not only are companies liable to corporate income tax both at the federal and state levels, but any profits paid to stakeholders in the form of dividends are charged on their income tax returns at individual rates.

Sole proprietorship

It has the most straightforward structure since it involves one person who manages the business. It is the best structure for anyone who wants to work alone.

The taxation aspect in a sole proprietorship is friendly since the enterprise's costs and earnings are included in the personal income tax return. The earnings and losses are put on the Schedule C form that is filed with the form 1040. The amount from schedule C is then translated to the personal tax return. It is mainly friendly since the losses your enterprise suffers may offset the earning you have gained from your other sources. Unlike other business structures, your business earnings are taxed once only with a sole proprietorship. Another big plus is you'll have full control over your business you'll make all the decisions.

Partnership

An enterprise that is owned and managed by more than one person requires a partnership business structure. There are limited and general partnerships. General partnerships, all owners are obliged to debts and other obligations. A limited partnership includes limited and general partners. Limited partners act as shareholders while general partners own the enterprise; thus, they have control, unlike limited partners. Partnerships have advantageous taxation. A partnership cannot pay tax on its earnings; however, the charges are transferred to the partners individually on gains and losses. During imposition, a partnership files tax returns on form 1065 that records the profit and loss to IRS. Additionally, every individual shows the share of earnings and losses on the Schedule K-1 of form 1065

LLC

It refers to a hybrid entity that entails the best attributes of a corporation and a partnership. They were established to give enterprise owners the liability protection that corporation experience without double taxation. The profits and losses are put in the personal tax returns of the owners.