Limited Liability Company
S-Corporation
C-Corporation
Non-Profit Corporation
Let us guide you about how to form an LLC, and different corporations that can bring positive impact on your reliability and taxation as a business owner.
The Limited Liability Company (LLC) is the best and most chosen business
structure for new startups and small business entities. Its comparatively easier
to manage an LLC with respect to prices and manageability as compared to other
business modules.
LLC tends to offer a limited liability protection to the owners, that means if
you own any liability, you are strictly limited to only that particular
business. This means that your LLC has nothing to do with any other business
operating in the market, nor it is causing any kind of influence on the personal
assets of any business.
Another important factor of an LLC is that they are not accountable to any
federal income tax. LLC is qualified for a ‘pass-through taxation’ which infers
that the income taxes incurred are reflected on the owner’s tax return and not
at the business scale.
When a new startup grows into a mature business slowly, it’s a
dream come true for their owners. Growth and expansion also tends to upsurge the
taxation of the company.
Companies that are growing at a large pace faces a lot of issues in the tax cycles.
There comes a point when they need to upgrade the LLC to S Corporation Business
Module. For small to medium businesses, S Corporations are highly recommended and
convenient for the taxation purposes.
If you are established and running your business on a national
level, then a C Corporation is the right fit for you. To smoothly regulate your
business and to straighten your taxation, a C Corporation is the widely renowned
business model.
A C Corporation is a distinguished method to build ownership of a business and it
differs prominently with other business structures like LLC, Sole Proprietorship,
etc. In C Corporation, a company’s profits are circulated as bonuses, which are then
circulated to shareholders. The business liabilities distinct from the directors,
investors, and shareholders.
A Non-Profit model of corporation is completely different from
other business models that are mostly focused on generating profits only. It
functions completely different and are aimed to benefit the employees only by
distributing profits among them. No profit is shared among the shareholders and
investors.
The profit distribution of a Non-Profit Corporation is to utilize this profit to pay
the wages of employees working for this corporation.
The formation of a LLC is cheaper and easier because its formed by smaller companies. All Limited Liability Companies are not liable for any business loss.
• S corporations do not have to pay corporate Tax.
• S corporations protect the personal assets of its shareholders.
• S corporation does not pay federal taxes at the corporate level.
Yes, a shareholder can freely sell his shares and the buyer will become the owner with both management and economic rights.
A Non-Profit Corporation unlike S-corporations, C-corporations and LLCs are not made for profit making. They exist to pay salaries to their employees and help their beneficiaries.