A major disadvantage of a corporation is the double taxation of the corporation's income and of dividends paid to shareholders. <span>Corporations end up paying taxes twice. The corporation pays tax when it shows a profit. Secondly the corporation pays tax when it pays out dividends to its shareholders. Sole proprietorships and partnerships are taxed as owners of the business. The owners of a corporation are taxed individually from the corporation. The advantage of this is that the owners of a corporation are not taxed on the corporation's profit. </span>
