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What are the Main Differences between an LLC and an S-Corp?

What Is a C-Corporation?

What Is an LLC?

What Is an S-Corp?

Which Type of Company Incorporation is Right for You?

 

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What Is A C-Corporation?

The business owner has a range of choices when it comes to legal structure. An individual, such as a shop owner, contractor or freelancer can create what is called a sole proprietorship. If you go into business with one or more others, you may decide to create a partnership. Should you choose to incorporate, however, you can go one of two ways: You can choose to form an S-corporation or a C-corporation.

So what is a C-corp?
A C-corporation is a structure most common to larger organizations that can also suit smaller ones. C-corp status offers tax and other advantages but also imposes a lot of administrative requirements on the business owner(s). Some states require more of the C-corporation than others. Generally speaking, however, the formulation of by-laws and articles of incorporation, the election of a board of directors, and scheduling and recordkeeping relative to directors' and shareholders' meetings are requirements.

Separate Entity
One thing that distinguishes the C-corporation from the sole proprietorship is that a C-corporation exists separately from its owners. This means that if the company is sued or goes into debt, the assets of the owner(s) will not be vulnerable. Forming a C-corporation can mean the difference between worrying about exposing your personal assets to claims from creditors, or allowing yourself to sleep peacefully at night.

Taxation
To establish that separate identity, a C-corporation is given its own tax identification number by the Internal Revenue Service. On the downside, the profits of a C-corporation are taxed twice: The corporation itself is taxed when its returns are filed. Shareholders who receive dividends are also taxed when they fill out and submit their individual returns. On the upside, C-corporations can deduct the cost of any fringe benefits they provide to employees when the corporate return is filed. This can make offering fringe benefits more affordable. A healthy program of fringe benefits may enable the business to attract more qualified employees.

Stockholder Matters
In addition, a C-corporation can raise capital by selling stock, something a sole proprietorship or partnership cannot do. In some instances, this capability may make it easier to raise financial backing. The administrative structure that accompanies C-corp status can prove to be a negative. Regular shareholder meetings must be held -- once a year at least -- and minutes must be recorded. Each corporation must have its own president, secretary and treasurer. Shareholders must elect a board of directors who are required to meet regularly and vote on major decisions. In some cases, those decisions must also be approved by the shareholders. In other words, a system of checks and balances created with an eye toward accountability must be established.

For business owners accustomed to making decisions regarding the direction of the company on the fly, this structure can seem cumbersome, if not counterproductive. Owners and employees alike may bemoan such changes, looking with nostalgia upon the days when the business was "smaller and more personal."

By-Laws and Articles
A C-corporation must file articles of incorporation with the state secretary of state's office. It must also create and record a set of by-laws. Very often, these administrative requirements require the services of one or more lawyers which can prove costly.

C-corp status offers definite positives, but its administrative requirements can prove deleterious to the entrepreneurial spirit.

Woodlands board likely to select incorporation consulting firm this week

The Woodlands Township Board of Directors is moving forward with an evaluation of possible incorporation with board members likely selecting a consulting firm this week to help in the process. The township's Board of Directors is set to meet in a special ...

Published:  Fri, 19 Jan 2018 15:59:00 GMT



Research delivers insight into the building information modeling market

This research report analyzes the building information modeling market, with a focus on key firms in the industry such as Nemetschek, Autodesk, Inc., Bentley Systems Incorporation and Trimble Navigation Limited. Research By Markets adds "Global Building ...

Published:  Sun, 21 Jan 2018 10:28:00 GMT



Berlin incorporation informational meetings set

With the election less than one month away to decide if Berlin incorporates, two informational meetings have been set for early February. The meetings are set Feb. 1 and Feb. 6 at 6 p.m. at the Berlin Community Center. Patrick Bates and others involved in ...

Published:  Thu, 18 Jan 2018 07:43:00 GMT



SEC rescinds Rappler's incorporation papers

THE Securities and Exchange Commission (SEC) has revoked the incorporation papers of online news site Rappler, Inc. and its parent company for failing to meet the constitutional limits on foreign ownership, as investors closely monitor the ruling's ...

Published:  Mon, 15 Jan 2018 07:15:00 GMT



Incorporation of Ex-Combatants in Humanitarian Demining: Lessons from Colombia, Somaliland & Southern Somalia

As part of the peace effort between the Colombian government and the FARC, a pilot program was launched in 2015 allowing ex-combatants from the guerrilla to collaborate with Army soldiers in humanitarian demining-an urgent task given the country's ...

Published:  Thu, 18 Jan 2018 12:19:00 GMT



Dilip Buildcon rises 3pct on incorporation of subsidiary to explore mining activities

Money Control reported that shares of Dilip Buildcon added 3 percent intraday as it has incorporated a subsidiary to explore the mining activities. A new company has been incorporated named as DBL-VPR Mining for exploring sector of mining activities ...

Published:  Mon, 08 Jan 2018 23:19:00 GMT



CDL: Announcement on Incorporation of Subsidiaries

11:29a CDL: Scheduled date for release of the Unaudited Financial Results for the Year.. 01/12 MILLENNIUM PTHORNE HOTELS: CDL hires Georgeson to woo investors in M&C Hotels b.. 01/11 CDLHT: Completion of Divestment of Mercure Brisbane and Ibis Brisbane 01 ...

Published:  Tue, 16 Jan 2018 02:31:58 GMT



Town fires back at city in incorporation dispute

TOWN OF BELOIT - Town officials fired back at Beloit City Manager Lori Curtis Luther after she announced the city believes it no longer can pursue boundary agreement discussions. In a news release Wednesday, Town Administrator Ian Haas said Luther and the ...

Published:  Thu, 11 Jan 2018 13:00:00 GMT



Property mogul gets certificate of incorporation

SOUTH Africa-based property magnate, Timothy Mncube, who recently expressed interest to invest in Zimbabwe, has obtained a certificate of incorporation from the Registrar of Companies, as he steps up efforts to start operating locally. Mr Mncube - who ...

Published:  Mon, 15 Jan 2018 14:36:00 GMT



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