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 |