How is taxation different in the corporate and proprietorship forms of business?  Explain double taxation.

In a proprietorship profit is taxed as personal income to the business owner. Hence, the business's profits are taxed only once, and that tax is at personal income tax rates. A corporation is a separate legal entity and is liable to corporate tax on whatever it earns. After deducting the corporate tax, whatever is left is distributed among shareholders as dividend. This also holds for the entrepreneur who owns the business as she doesn't own its earnings directly, the corporation owns them. The dividend is a taxable income to any individual. Hence, the entrepreneur will pay individual taxes on the after (corporate) tax earnings of the company. In other words, the profits of the business will be taxed twice, once at corporate rates and once at individual rates, before the entrepreneur gets to spend any of the business's earnings.