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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.

The Swiss are using blockchain to refine their clunky business incorporation process

Here's a little-known fact: it's approximately as difficult and time-consuming to incorporate a business in Switzerland as it is in the Democratic Republic of the Congo. Swiss entrepreneurs face on average a six-week-long, paper-heavy process to legally ...

Published:  Thu, 24 May 2018 14:04:00 GMT



Head-mounted Display Market - Incorporation of Gesture Recognition to Boost Growth | Technavio

LONDON--(BUSINESS WIRE)--May 25, 2018--The is expected to grow at a CAGR of approximately 37% during the period 2018-2022, according to the latest market research report by . This press release features multimedia. View the full release here: https://www ...

Published:  Fri, 25 May 2018 09:35:00 GMT



Yearlong incorporation study kicks off in The Woodlands

The Woodlands Township leaders may decide by early next year whether to recommend that voters consider turning the community into a city, according to township board Chairman Gordy Bunch. Bunch wrote in an email that the two consulting groups are helping ...

Published:  Mon, 14 May 2018 05:51:00 GMT



CLPS Incorporation Announces Pricing of $10.5 Million Firm Commitment Initial Public Offering

Shares to Commence Trading on May 24, 2018 on the NASDAQ Capital Market as "CLPS" Shanghai, China, May 23, 2018 (GLOBE NEWSWIRE) -- CLPS Incorporation (the "Company"), a global leading information technology ("IT" ), consulting and solutions service ...

Published:  Thu, 24 May 2018 07:23:00 GMT



Amesbury's big weekend arrives with Incorporation Day, Memorial Day

AMESBURY - The city will mark the 350th anniversary of its incorporation Sunday and plenty of activities are planned in observance of both that day and Memorial Day this holiday weekend. Incorporation Day opening ceremonies will be held at City Hall ...

Published:  Sat, 26 May 2018 00:17:00 GMT



No incorporation necessary for referendum, says Justice Minister Jordan Brown

Justice Minister Jordan Brown says he doesn't anticipate that groups will be required to legally incorporate as a not-for-profit in order to become an advertiser for the upcoming referendum. MLA Hannah Bell had raised the issue during Wednesday's ...

Published:  Fri, 25 May 2018 05:58:00 GMT



Buy Infibeam Incorporation; target of Rs 259: KR Choksey

Unicommerce is an e-commerce enabler and provides a range of cloud-based solutions for managing the supply chain process: Multichannel Order & Inventory Management, Omnichannel Retailing and Warehouse & Logistics Management. The company is running a SaaS ...

Published:  Mon, 21 May 2018 04:46:00 GMT



LINE Corporation Establishes New Subsidiary by Company Split (Simplified Incorporation-Type Company Split)

TOKYO--(BUSINESS WIRE)--May 25, 2018--LINE Corporation (NYSE:LN) (TOKYO:3938) (Headquarters: Shinjuku-ku, Tokyo, Japan; Representative Director and CEO: Takeshi Idezawa; the "Company" ) announced that the Company has decided at the board of directors ...

Published:  Fri, 25 May 2018 20:37:00 GMT



Baton Rouge Area Chamber voices opposition to St. George incorporation

The Baton Rouge Area Chamber board has voted to formally oppose the incorporation of the proposed city of St. George. BRAC and East Baton Rouge Parish Mayor-President Sharon Weston Broome had previously gone over St. George's budgets but expressed doubts ...

Published:  Tue, 15 May 2018 08:37:00 GMT



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