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Incorporate In provides information on how to incorporate a business. Incorporation Made Easy | What are the Costs? | Which is Best for me? | Delaware or Your State? |
Which Incoporation Type is Best for me?
For smaller business startups, the most popular incorporation method is the S-Corp. Below are the basics for the LLC, C-Corp, and S-Corp.LLC
• Pass-through tax entity. Income or loss generated by the business is reflected on the personal income tax return of the owners.
• Stock ownership can be divided into numerous classes.
• Owners must obtain approval of the other owners before ownership can be sold.
• Non-US residents can be members.
• Owners are typically not personally responsible for the debts and liabilities of the business.
• Not required to hold such meeting; however, it is a good idea to document major decisions of the company.
C-Corp
• Separately taxable entity. The profits and losses are taxed directly to the corporation. This can lead to double taxation on dividends that are paid out of corporate profits to the owners.
• Stock ownership can be divided into numerous classes.
• Typically not required to get approval of the other shareholders before selling stock.
• Non-US residents can be members.
• Owners are typically not personally responsible for the debts and liabilities of the business.
• Must hold annual meetings of shareholders and directors each year and meeting minutes must be kept with the corporate records.
S-Corp
• Pass-through tax entity. Income or loss generated by the business is reflected on the personal income tax return of the owners.
• Stock ownership is restricted to no more than 100 shareholders.
• Stocks are freely transferable.
• May not have non-US residents as shareholders.
• Owners are typically not personally responsible for the debts and liabilities of the business.
• Must hold annual meetings of shareholders and directors each year and meeting minutes must be kept with the corporate records.
Incorporation Made Easy | What are the Costs? | Which is Best for me? | Delaware or Your State?