You can't 1099 an 'employee', by definition. I'm not quite sure whose side you are asking this from? Are you the business sending the 1099's or are you the person getting one? I get the impression it may be you getting one or you probably wouldn't care about having to "register" as a business.
Several comments. First, theoretically speaking, if you do any self-employment you're a business. Tax-wise you would you have to do a Schedule C as though you are a business. But you don't have to "register" as one. Incorporation, or having employees yourself, are the only real ways to "register as a business." If you conduct business and get paid for it, you're automatically a business.
If you consider that you were an employee of this company, they should not be sending a 1099, but rather a W-2. If you thought you were an employee, you may have gotten screwed. When you're a 1099 worker, you do not have any taxes deducted, so you have to save the money up yourself and get them paid, and if it's enough, you have to pay them quarterly. You also have to pay
both halves of FICA. (It's not really quite double and I won't elaborate why at the moment.) You also are not covered under any type of unemployment or worker's comp, so if something happens, you're on your own.
It is
up to the employer to make sure you got categorized correctly and that the reporting is correct. If you feel this wasn't correct, you need to contact them and try to get it changed. You would also need to know how you really should be categorized. This is an overview of the concept:
Employee vs. Independent Contractor ? Ten Tips for Business Owners
Some employers make workers contractors simply to avoid paying the extra taxes due and avoid the hassle of keeping track of all that. But that isn't a reason to do it. It's cheating. And while I have no sympathy for the IRS, I do have sympathy for the people who get treated like employees but end up with a 1099 unexpectedly.
The advantages to being a 1099 worker are that you should really be like a self-employed person and have the freedoms that go along with that. Yes, you have to do satisfactory work, certainly, and you have to do the work that you were meant to do. But you should not be controlled in the same manner an employee would be, you should have more freedom of hours you work, the way in which you work, that sort of thing. So that's the advantages.
The disadvantages is having to pay estimated taxes, having to pay extra FICA, not having the protections of unemployment and workers comp.
If you're being treated as 1099, make sure that you really are. You do not want to end up with the disadvantages of being an employee
and the disadvantages of being 1099. I've been in that circumstance.
If you think you're supposed to be W-2, talk to them. If you feel you've been categorized wrong and you don't like it, you can report them.
(And if you happen to be the employer in this case, you should be paying attention to all of this anyway.)
I have to say I'm curious why you're asking this at this particular time of the year?