One of the major advantages of a corporation is that there is limited liability. The shareholders of a corporation cannot be held liable for the debts of a corporation. Also, since a corporation is a separate entity, there is no tax liability for the shareholders. With that said, however, after a corporation pays taxes on its earnings, taxes are paid a second time on these earnings by
. shareholders after they receive dividends. Another disadvantage of corporations is that the start up costs are usually very expensive.
