Pass Through Taxing

In a pass through entity, the corporate entities don't pay taxes. Instead the owners of the business pay them. A restaurant is a "pass through entity."

Question: In a restaurant, what is the difference between the "corporate entity" and "owner"?

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MLPs/partnerships, LLCs and trusts are the most common forms of flow-thru entities. These are distinct from corporations for a number of legal reasons, most significantly that corporations are standalone legal entities existing apart from their ownership roster and through which creditors and other stakeholders in the entity cannot lay claim in order to get at the assets of the partners/members/settlors.

 
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