How are corportations different from sole proprietorships?

Answer 1

Corporations are legal entities separate from their owners, providing limited liability protection, which means shareholders are not personally responsible for the company's debts. In contrast, sole proprietorships are owned and operated by a single individual, who bears full personal liability for business obligations. Corporations also have more complex regulatory requirements and can raise capital by selling shares, while sole proprietorships are generally simpler to establish and manage, with profits taxed as personal income.