What Are The Different Types of Corporations?

June 25, 2021 / 10:16 am

Depending on your type of business, you have three options for incorporating: C corporation, S corporation, or LLC. Each option requires formal documentation and

must be filed with the appropriate state agency.

A C corporation might be the right business type for you if you:

- May need venture capital for financing

- Want flexible profit-sharing among owners

- Want company earnings to stay in your business so that it can grow

An S corporation might be the right business type for you if:

- You want to take advantage of benefits that the corporate business type holds, but you want to take advantage of pass-through taxation

- You want the flexibility to set salaries for employee/owners to minimize Social Security and Medicare taxes

- Flexibility of accounting methods is desired

An LLC might be the right type of business for you if:

- Your startup company anticipates losses for at least two years, and you want to be able to pass the losses through to yourself and the other owners

- Flexibility for accounting methods is desired because LLCs are not required to use the accrual method of accounting as C corporations typically are:

- Your business may own real estate

- You want management flexibility

The above are just a few of many examples. You can contact our office any time for more information about which type of incorporation is right for your business.