There are four general types of corporations in the United States: a sole proprietorship, a Limited Liability Company (LLC), an S-Corporation (S-Corp), and a C-Corporation (C-Corp). A C-Corporation is taxed separately from its owners and offers the strongest protection from personal liability. C-Corporations can have an unlimited number of shareholders and can be publicly traded on stock exchanges. Nonprofits are tax exempt due to their public-service missions.
The corporation itself gets permission to enter into contracts, own assets, remit federal and state taxes, or even borrow money from banks. A corporation is often thought of as a person — they have their own rights, are subject to unique privileges and liabilities, and are wholly distinct from their members or owners in the eyes of the law.
Statistics and Structures
In 2019, the number of businesses in the United States of America was estimated at around 30 million, which included around 2 million C-corporations and 7 million S-corporations. An LLC is a business structure for private companies, one that combines aspects of partnerships and corporations.
Understanding Corporations
When people refer to a corporation, they typically mean one of two types: C-Corporations or S-Corporations. Corporations offer different benefits like taxes, managing capital, and planning. From sole proprietorships and partnerships to corporations and LLCs, it is important to find the right business type.