C-Corp vs S-Corp: Choose the Right Corporation Type
Both C-Corporations and S-Corporations offer liability protection, but differ significantly in tax treatment and ownership rules. Here’s how they compare.
Get Started NowC-Corp vs S-Corp: Key Differences
1. Taxation
C-Corp: Subject to double taxation (corporate and shareholder levels).
S-Corp: Pass-through taxation; income reported on shareholders’ personal tax returns.
2. Ownership
C-Corp: Unlimited shareholders, including foreign individuals and entities.
S-Corp: Limited to 100 shareholders who must be U.S. citizens or residents.
3. Stock Classes
C-Corp: Can issue multiple classes of stock.
S-Corp: Only one class of stock allowed.
4. Ideal For
C-Corp: Startups planning to raise venture capital or go public.
S-Corp: Small to mid-sized businesses looking for pass-through tax benefits.
5. Formalities
Both C-Corp and S-Corp must maintain corporate formalities like bylaws, meetings, and record-keeping.
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