Disadvantages of Corporations:

Difficulty of termination

- Once a corporation has started, it's hard to end.

Extensive paperwork

A corporation must keep detailed financial records, the minutes or meetings and much more.

Two tax returns

An individual who incorporates must file both a corporate tax return and an individual tax return.

Size

Large corporations sometimes become too inflexible and tied down.

Possible conflict with stockholders and board of directors

Conflict may occur if the stockholders elect a board of directors who disagree with management.

Double taxation

Corporate income is taxed twice

Initial cost

Incorporations may cost thousands of dollars and require expensive lawyers and accountants.