raising capital
no double taxes
flexible management
tax exemptions
employee benefits
easy maintenance
based on your answers, the majority of on call lawyers recommend:
best choice
best choice
best choice
best choice
llc
- common for small businesses
- raise money using bank loans
- variety of management structures you can implement
- relatively easy compliance requirements
- taxes paid on personal tax returns
- limited tax deductions
- formation fees are tax deductible
c-corp
- raise money from investors
- state-defined management structures
- potential double taxation
- wider range of tax deductions
- formation fees are tax deductible
s-corp
- limited to 100 shareholders
- state-defined management structures
- taxes paid on personal returns
- wider range of tax deductions
- formation fees are tax deductible
- can only be owned by u.s. residents
non-profit
- common for charities
- tax-deductible donations
- strict state management structures
- wide range of tax deductions
- formation fees are tax deductible
any recommendation is based on a survey of 2022世界杯32强抽签时间
on call attorneys and does not constitute legal advice.
want to compare all the details?
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| llc | s-corp | c-corp | non-profit | sole proprietorship | |
| managing your business | |||||
 limited liability protection | |||||
| llc members are not personally responsible for business debts or liabilities. | c-corp shareholders are not personally responsible for business debts or liabilities. | s-corp shareholders are not personally responsible for business debts or liabilities. | non-profit directors are not personally responsible for npo debts or liabilities. | sole proprietors are personally responsible for business debts and liabilities. | |
|
perpetual existence | varies | ||||
| with the proper planning, llcs can exist for generations. | s-corps continue to exist even if the owners or majority shareholders leave or pass away. | c-corps continue to exist even if the owners or majority shareholders leave or pass away. | non-profit organizations and institutions survive after their directors leave. | sole proprietorships do not exist when the owner quits or passes away. | |
| favorable for raising capital | varies | ||||
| llcs can raise money via banks and investors but cannot sell stocks. | s-corps can get loans from banks, as well as distribute stock to up to 100 people. | c-corps have the easiest time raising capital as there is no cap on how many people can own stock. | non-profits can both get loans and receive tax-deductible donations. | sole proprietorships can occasionally receive bank loans but cannot sell stocks. | |
| management flexibility | |||||
| llcs allow for a large variety of management structures based on your specific needs. | management structures for s-corps are largely dictated by state and federal law. | management schemas for c-corps are largely dictated by state and federal law. | npos need to follow strict management laws to guard their non-profit status. | since sole proprietorships have only one member, there is no management structure. | |
| tax considerations | |||||
| pass-through taxes | |||||
| llc members are taxed on their personal tax returns. the llc itself is not taxed. | s-corp shareholders are taxed on their personal tax returns. the company itself is not taxed. | c-corps are taxed both at the corporate level and again on shareholders' individual returns. | non-profits are taxed on a corporate level but may also enjoy a host of tax-exempt benefits. | sole proprietorships are taxed only on their owner's tax return. | |
| double taxation | |||||
| since llcs can be a pass-through entity, owners are taxed on their personal income. | s-corp shareholders are taxed personally. the s-corp, however, is not. | c-corp income is taxed at the corporate level first, then again at the personal level. this is called "double taxation." | non-profits are only taxed once and can write off most of their expenses. | sole proprietors are taxed only on their personal tax return. | |
|
tax exemptions | |||||
| llcs can claim deductions but not tax-exempt status. | s-corps can claim deductions but not tax-exempt status. | c-corporations are not tax-exempt entities | not only are donations to non-profits tax-exempt, but npos can themselves apply for tax-exempt status. | sole proprietorships are the least official business entity and cannot claim tax exemption. | |
| state government fees | |||||
| formation fees | |||||
| llcs must pay state fees during the incorporation process. these fees are tax deductible. | s-corps must pay state fees to legally incorporate. these fees are tax deductible. | c-corps must pay state fees to become legally recognized. these fees are tax deductible. | non-profits pay state fees when they incorporate. these fees are tax deductible. | since sole proprietorships aren't incorporated entities, they don't pay formation or compliance fees. | |
|
compliance fees | |||||
| while llcs have less compliance requirements than other entity types, there are reports and licenses that need to be filed and maintained. | s-corps usually will need to file reports and pay compliance fees on an annual or semi-annual basis. | c-corps generally must file reports with their state, as well as a host of other regulatory and compliance fees. | non-profits have more compliance responsibilities than other entities as they must continually preserve their tax-exempt status. | sole proprietors do not have ongoing compliance fees. | |
need help? talk to an incorporation specialist: (800) 518-8976 | create your llc start now start now | create your s-corp start nowstart now | create your c-corp start now start now | create your non-profit start nowstart now |
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