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Probably the most complex organizational structure for companies is the company. This type of enterprise construction separates the liabilities and obligations incurred by firm operations from being the accountability of the house owners. Corporations are regulated by the laws of the state they are set up in. Not like sole proprietor and partnership businesses, companies are taxed as separate entities at company tax charges. The IRS taxes company house owners at particular person tax rates. There are two widespread sorts of company buildings: Subchapter C and S. The different between the 2 subchapters stem from completely different tax rules. Atypical companies are thought-about Subchapter C corporations. Subchapter S firms, not like Subchapter C firms, can cross income and losses onto their shareholders to avoid paying federal revenue taxes. This prevents double taxation of corporation profits.