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(a) Extensive government regulations. There are more regulations affecting a corporation than a sole proprietorship or partnership. Corporations must report to all levels of government.

(b) Activities limited by the charter and bylaws. Depending on the jurisdiction, charters can be very broad or can severely restrict a company’s activities.

(c) Manipulation. Minority shareholders are potentially in a position to be exploited by the decisions of the majority of the company.

(d) Expense. It is more expensive to establish and operate a corporation due to the additional documents and forms that are required. As well, operating losses stay in the corporation.