A corporation essentially becomes an individual entity in and of itself, completely separate from its owners and managers. Thus, the corporation can be sued and sue others with no liability extending to the individual owners. However, being a separate entity, the corporation is thus taxed directly like an individual would be. For this reason, the corporation is often associated with double taxation in that the corporation's profits are taxed and the owner's take home income is also taxed. Based on these choices, it is advised that the e-commerce business should choose to act as a corporation. In the world of e-commerce, incorporation makes sense because it ensures protection from any forms of liability...

Because e-commerce occurs across jurisdictions, including international borders, a corporation will be most advantageous as this form of business structure is generally recognized around the world and thus will provide the best legal and financial protection for all transactions, regardless of where they occur.
Bibliography

Lientz, Bennet P., Kathryn P. Rea. (2000): Start Right in E-Business: A Step-by-Step Guide to Successful E-Business Implementation. New York: Elsevier Science & Technology Books.

Pakroo, Peri H., Repa, Barbara Kate. (2006): The Small Business Start-Up Kit. New York: NOLO Publishers.