Flow-Through Entity
Categories: Tax, Company Management
See: Pass-Through Entity.
Pass or flow...whatever you call it, refers to the notion that a corporation makes, say, $10 million in profits before tax. Rather than pay tax at the corporate level and then pay tax again after those profits are distributed to the partners, the company passes through, allowing the profits to flow through to the partners without corporate tax so that the partners are taxed personally...but not twice.