Business Start Up Help: The 3 Corporation Types

Some of the most basic business start up help you can receive is assistance in legally incorporating your business. There are 3 basic structures you can incorporate under, each with its own benefits.

C-Corp

A C-Corp is a traditional corporation. It is owned by an individual or shareholders who are separate from the corporation. This means the corporation pays its own taxes each year, and the owners pay taxes based on their individual earnings.

S-Corp

The S-Corp structure is for a small business whose owner does not require a separate business entity for his or her business. Instead, the owner and the business will file one tax claim each year. The main benefit to this structure is in taxes, where there is a wide array of deductions available.

LLC

A Limited Liability Company, LLC, is designed to take the best of both worlds from the C and S structures. It offers virtually all the tax benefits of an S-Corp, but it adds a layer of structure from the C-Corp that is lacking with the basic S structure. This is the most expensive license to obtain. However, it offers the most benefits in terms of protection from lawsuit. The LLC itself can be sued, but the business owners are held separate.

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