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The owner of the business is responsible and liable for any debts incurred by the business since despite having a business name, they are one and the same. If the company accrues debts, the creditors may seize the business owner's personal property. Corporate tax rates cannot be applied to a firm structure. All profits earned by the business are subject to personal taxation by the owner.
The term is frequently used informally to refer to a business, such as a corporation or cooperative. However, lawyers and public officials do not business use it in this way.
Unlike sole proprietorships and partnerships, corporations are a distinct business legal entity that offers limited responsibility to its owners/members and is subject to corporate tax rates.
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