A C-Corporation is the most common corporate structure. It offers a large array of benefits including increased asset protection, an unlimited number of stockholders and many tax benefits. A Corporation is regulated and governed by the state in which it is formed. As a business owner you need to seriously consider in which state you incorporate. For preferred states, such as Nevada, you can take advantage of the following benefits:
Corporations may elect to be recognized as an S-Corporation after they are formed to take advantage of a special tax status with the IRS. Often small business owners choose this option if they prefer to be taxed as if they were a sole entrepreneur or partnership but still want the asset protection a corporation provides.
Entrepreneurs often elect for the S-corporation for the corporate income tax savings and reduction in payroll taxes. The disadvantage of an S-corporation is that it doesn't allow for many of the fringe benefits that a C-Corporation does. There are also some restrictions as to who can file for S-Corporation status.
All though the LLC is not a Corporation, it provides many of the same benefits as a Corporation. This is another option that is often attractive to small businesses because it provides the limited liability benefits of a Corporation with the "pass-through" taxation of a sole proprietorship or partnership. In addition, unlike a Corporation, members of an LLC have the ability to control other members' ability to transfer ownership by voting power of their membership.
Last but not least, the ownership restrictions subject to S-Corporations are not applicable to the LLC making this structure ideal for foreign investors.
Talk to us about which is the right entity for you.