Limited Liability Company (LLC): An LLC is a corporate structure in which the owners are not personally liable for the company’s debts or liabilities. LLCs combine the characteristics of a corporation with those of a partnership or sole proprietorship. LLCs do not pay taxes, their profits and losses are passed through to the members, who claim them on their tax returns.
Owners are protected from personal liability for any debts or obligations
Owners can choose how the business pays taxes
Not required to have annual meetings
Not required to have a board of directors
Can have unlimited shareholders
Maintain pass-through taxation, which helps in the case of small businesses
S - Corp: A small business corporation that is treated for federal tax purposes as a partnership. This type of corporation must have less than 100 shareholders.
Avoids double taxation by passing the income through to the owners
Protects the personal assets of the shareholders
In general, able to get more loans
Owners share net profits and report their share on personal income taxes
C - Corp: A legal structure for a corporation in which the owners, or shareholders, are taxed separately from the entity. C corps are also subject to corporate income tax. This type of corporation is subject to a double taxation, the taxing of profits are both administered at the corporate and personal level.
Owners do not have personal liability
Gain more access to financial resources
Exists separately from the lives of its stockholders
Nonprofit: Nonprofits are organizations which are built to address a social purpose. Nonprofits are excused from federal tax liability. However, these organizations must distribute surplus earnings to a social cause.
Does not pay income taxes on money it receives for charitable purposes
Donors are able to use their donation as a tax deduction