Corporation Types

Types of corporations we can form for you

Corp1 is a document filing and registered agent service, and we are not attorneys or accountants.  We cannot give you legal advice as to which entity type you should form. Feel free to use this information to help guide you. You should always ask your accountant or attorney which business entity is best suited for your particular needs.

Corporation

Beginning File a certificate of incorporation
Ownership No limit on amount of shareholders
Managed by Shareholders, Officers & Directors
Tax Structure Income and shareholder dividends are both taxed as they are earned
Stock No limitations on amount of stock that can be authorized
Limits Personal Liability Yes, limited to the amount invested by the shareholder
Can Be Owned by other Companies or Non-US Citizens Yes
Annual Requirements Most states require filing an annual report &/or paying an annual franchise tax
Advantages structure limits each owner’s (shareholder's) personal liability for the corporation’s business debts to the amount invested in the company by the shareholder.
Disadvantages Double Taxation of revenue & stringent record-keeping requirements

 

S Corporation

Beginning File a certificate of incorporation & file Sub-Chapter S election form with IRS within 75 days of forming the new entity
Ownership Maximum of 100 Shareholders
Managed by Shareholders, Officers & Directors
Tax Structure Allows income to pass-through the entity to the shareholder's personal tax return thereby only being taxed once
Stock Limited to one class of stock and can never go public
Limits Personal Liability Yes
Annual Requirements Most states require filing an annual report &/or paying an annual fanchise tax
Advantages Provides flexibility to set salaries for employee/owners to minimize Social Security and Medicare taxes
Disadvantages Cannot be owned by other companies or non-US citizens, cannot go public

 

Limited Liability Company (LLC)

Beginning File Certificate of Formation (also called Articles of Organization) with State and draft internal Operating Agreement.
Ownership Unlimited Members
Management Structure Managed by LLC Members
Tax Structure Allows income to pass-through the entity to the shareholder's personal tax return thereby only being taxed once"Pass-Through" (Generally earnings are taxed once at the member level)
Stock Unlimited Membership Interests
Limits Personal Liability Yes
Can be Owned by other Companies or Non-US Citizens Yes
Annual Requirements Most states require filing an annual report &/or paying an annual LLC tax
Advantages LLCs enjoy much greater flexibility in that they are not required to maintain the detailed record keeping that corporations need to maintain the liability protection.
Disadvantages slightly more costly to maintain in most states

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