what is a disregarded entity 
 disregarded entity is a tax term like an s corporation a limited liability business structure allows income and losses to pass down to its owners personal tax returns the business structure itself is disregarded by the irs for tax purposes 7the bottom lineeach business owner is equally responsible for any and all debts that accrue within an unlimited liability business structure their personal assets are at risk if the business is unable to repay or defaults on its debt this type of structure is typically suitable for small businesses with limited assets and debts consult with a financial advisor or attorney in your state if you re considering forming and operating this type of business entity 