Difference in Tax Treatment
The biggest difference between a C corp and S corp is how they are treated for tax purposes. S corporations are not taxed at the corporate level, allowing for avoidance of double taxation and tax savings.
Ownership and Taxation
C Corporations face double taxation and are separate entities, while S Corps are taxed once and are pass-through entities.
Key Considerations
As a startup founder, understanding the differences between S Corps and C Corps is crucial for making an informed decision about the best business structure.
Choosing Between C Corp and S Corp
Should my startup be an S corp or C-Corp? This decision may depend on factors such as seeking investors early on or benefiting from the tax advantages of an S Corp.
Determining Corporation Status
If you’ve decided to incorporate, determining your status as a C corp or S corp is essential. Filing the correct forms is crucial in establishing your tax structure.
Differentiating S Corps and C Corps
While both offer personal liability protection, S corps and C corps vary significantly in terms of tax treatment and ownership structure. Understanding these differences is vital for business owners.