Katie Chatwick runs a home-based business called Pregnant Paws (PP), which breeds Persian cats. Katie has been able to find a ready market for the limited number of kittens produced annually by breeding female Persians, called queens, each year. Although each four-month-old pedigreed Persian kitten sells for $700, Katie has operated PP as a break-even hobby. PP is currently a sole proprietorship owned by Katie. Katie was planning to incorporate because a friend told her this would save money. Recently, at a local business event, an acquaintance told her that corporations are only for the big guys and that, because she is a family-run business, it isn't logical for her to incorporate her business.

Katie is very confused and needs more information about her ownership structure options?