If you want your business to outlive you, you might want to consider incorporation. Technically, corporations must pay taxes on profits. Double taxation isn't usually an issue for smaller, private corporations, who generally pay little or no corporate income taxes. Because profits go directly into increased salaries or bonuses, thus avoiding corporate income taxes. However, double taxation is a concern for large, publicly held corporations who distribute profits to hundreds or thousands of shareholders.
Corporations are subject to strict rules about record keeping.
If these rules are ignored, investors may lose their shield against personal liability. The fact that each state has its own set of regulations complicates matters, which means you should consult an attorney and a tax accountant. Potential for decreased flexibility. Each corporation must have a board of directors. The board, which is usually elected by stockholders, has ultimate authority over the direction of the company, approving all major decisions.