LLCs vs. Corporations
Limited Liability Company (LLC)
✓ Requires Business Tax Returns to be Filed Separate from Owners’
✓ Protects your Family’s Assets from Lawsuit and Debt Liability
✓ Profits Will “Pass Through” to Owners’ Personal Taxes
✓ Flexible Management Structure
✘ Recognized Abroad
✘ IPO Stock Options
✘ Accepts Investors
Corporation (Inc)
✓ Requires Business Tax Returns to be Filed Separate from Owners’
✓ Protects your Family’s Assets from Lawsuit and Debt Liability
✓ Profits Will “Pass Through” to Owners’ Personal Taxes
✘ Flexible Management Structure
✓ Recognized Abroad
✓ IPO Stock Options
✓ Accepts Investors
Which type of Corporation is right for you?
Once you’ve decided on opening a Corporation, you must select either a “C” designation or an “S” designation. Use the comparison chart below to decide which is the most appropriate type of Corporation for your needs.
S-Corporations vs. C-Corporations
S-Corporation
✓ Owners Pay Taxes on Profits in their Personal Income Tax Returns
✓ All Profits/Losses “Pass Through” to Owners’ Personal Taxes
✓ Shareholders must be US Citizens or Resident Aliens
✘ Subject to Corporate Income Tax
✓ 100 Shareholder Maximum
C-Corporation
✓ Owners Pay Taxes on Profits in their Personal Income Tax Returns
✘ All Profits/Losses “Pass Through” to Owners’ Personal Taxes
✘ Shareholders must be US Citizens or Resident Aliens
✓ Subject to Corporate Income Tax
✘ 100 Shareholder Maximum
You can designate how your business will be taxed
Once a Corporation or LLC is formed, you have 75 days to notify the IRS how you’d like your business to be taxed. Get familiar with your options by reviewing the chart below
Single Owner LLC
Has the ability to be taxed as a:
Sole Proprietorship
Corporation
Multiple Owner LLC
Has the ability to be taxed as a:
Partnership
Corporation
S-Corporation
Has the ability to be taxed as a:
C-Corporation
S-Corporation
C-Corporation
Must pay corporate taxes, in addition:
Income Taxed at Corporate Level
Also at Personal Level – If Dividends Paid