Which type of corporate structure allows owners to be taxed separately from the entity itself?

The C corporation is a type of corporate structure that allows for separate taxation of the entity and its owners. This means that the corporation itself is taxed at the corporate tax rate on its profits, and any dividends distributed to shareholders are then taxed again at the individual shareholders’ tax rates, leading to what is known as "double taxation."

This structure provides a clear distinction between the corporation and its owners, enabling the corporation to retain earnings for reinvestment without immediately passing on tax obligations to shareholders. C corporations can also benefit from certain advantages, such as the ability to offer various classes of stock and the prospect of raising capital through equity financing.

In contrast, S corporations, limited liability companies (LLCs), and partnerships usually facilitate pass-through taxation, where the income is reported on the owners' personal tax returns, thus avoiding the double taxation associated with C corporations. This characteristic makes the C corporation unique in its approach to taxation under the current tax system.