-- No special filings or rules for operating the business.
-- Profits and losses reported on owner's personal income taxes.
-- No protection from liability or claims against the business.
REGISTRATION REQUIREMENTS AND FEES
-- None.LIMITED LIABILITY COMPANY (LLC)
-- Owners have limited personal liability for claims against the business.
-- Flexibility to apportion profits and losses.
-- Distributions subject to self-employment taxes.
-- Venture capital and other investors prefer more traditional corporate structures.
-- Articles of organization must be filed with a state business filing office.
-- Usually under $100.S CORPORATION
-- Personal liability for claims against a business is limited.
-- Profits and losses reported on owners' personal income tax statement.
-- Salaries are subject to income and employment taxes.
-- Profits and losses can be allocated only in proportion to each shareholder's ownership interest.
-- Some states and municipalities tax S corporations as regular C corporations.
-- Owners file articles of incorporation with the state business filing office, IRS Form 2253, and possibly state forms.
-- Depend on the number and type of shares authorized.C CORPORATION
-- Extensive case law that supports business owners' limited personal liability for claims against the business.
-- Lower tax rates on income between $50,000 and $75,000.
-- Favored by venture capital and equity investors.
-- Income is taxed once at the corporate level and again when distributed to shareholders as dividends.
-- Separate tax structure requires separate accounting and reporting.
-- Administrative overhead such as a board of directors and annual meetings.
-- Owners file articles of incorporation with the state business filing office.
-- Depend on the number and type of shares authorized.
DATA: LLC OR CORPORATION? HOW TO CHOOSE THE RIGHT FORM FOR YOUR BUSINESS BY ANTHONY MANCUSO