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What type of corporation should I set up?
Limited Liability Company
Forming a limited liability company protects your personal assets by keeping them separate from your business assets, and it provides the greatest flexibility available when it comes to taxation and business structure.
An LLC is the most common choice for small businesses with a single proprietor or a small number of members, as it offers the protections of incorporation without the same requirements necessary for larger, multi-shareholder companies.
S Corporation
S corporations offer specialized taxation that limits the company’s liability. When you form an S corporation, the company itself isn’t taxed. Instead, profits and losses are tallied and taxed after being distributed to shareholders.
For this reason, an S corporation is most often chosen by companies incorporating with multiple shareholders, and is considered a good alternative to legal business partnership because it provides tax benefits without the overhead and complexity.
C Corporation
In C corporations, profits are taxed at the business level before being distributed to shareholders, but the main feature of this type of incorporation is that it offers certain advantages that some companies require.
Specifically, a C corporation is the only option available for US companies choosing to work with foreign investors. Forming a C corporation also allows you more flexibility with shareholder involvement by making it possible to create multiple classes of stock.
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Limitless Communications of Farmingdale Inc., NY
Still undecided? Let us help!
Our knowledge center is full of helpful information to assist you in the decision-making and incorporation process. Check out some of our most popular guides:
The Best & Worst States to Incorporate In
Tax climate is one of the biggest factors business owners want to know about before incorporating. Find out which states have the best business tax climate for forming an LLC or corporation.
The Best & Worst States for Minority-Owned Small Businesses
Which states rank highest and lowest for racial diversity in entrepreneurship, both in volume and by proportion? See top 10 best and bottom 10 worst states.
The Best & Worst States for Women-Owned Small Businesses
How does your state rank when it comes to women-owned small businesses? Check out state-by-state rankings for female entrepreneurship in the U.S.
The Best & Worst States for Small Business Lending
Is getting a business loan an important step in funding your company? Look at a complete state-by-state ranking of small business loan statistics to help decide where to form your corporation or LLC.
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