Businesses are able to “incorporate,” which is a way of structuring a business depending on the size and needs of a company. There are 4 types of companies; C corporations, S corporations, LLCs, and non-profit. LLCs, or limited liability companies, are not actually incorporated. Instead, you form an LLC by filing Articles of Formation with the Secretary of State.
C Corporations and S Corporations
Corporations of this variety are generally large in magnitude and structure, which is why, by definition, C corporations are structured so that the company is taxed as its own entity, separate from its owners who are also taxed. C corporations are structured the way that they are most specifically for U.S. federal income tax purposes. While a C corporation is taxed as its own, individual entity, an S corporation differs in this respect. S corporations have shareholders, and it is the shareholders who are taxed.
When it comes to S corporations, the corporation itself is not subject to taxation. S corporations are also smaller in comparison to C corporations. S corporations have a limited number of shareholders who are residents or citizens. C corporations may be formed without regard to domestic or foreign, or number of shareholders, which is it fits perfectly on a largely structured business. Corporations, when they are formed, are subject to the laws of their respective states and/ or the District of Columbia. When a company such as an S corporation or C corporation actually “incorporates” they are given a certificate of incorporation from the state in which it was formed. Corporations are required by their respective states to have a sort of governing board, and this requires that there be a set of bylaws to which the company adheres.
By the way, McDonald's is an example of a corporation.
LLCs and Non-Profit Companies
Limited Liability Companies, or LLCs, are a blended form of business that intermarries corporate structure and partnership. LLCs are not technically corporations by legal definition but rather a form of a company by legal standards that provides a limited liability as it relates to those in ownership of the company under U.S. jurisdictions which can prove to be broad. Non- profits and LLCs can be closely interchangeable; an LLC does not have to be formed as a business that brings in revenue. A similar type of LLC is formed when it a company that offers medical services, for instance and this form of company is called a Professional Limited Liability Company or PLLC. This also applies to companies that are providing legal services. While non-profit companies may bring in revenue and even have paid employees, they are able to retain their status only by keeping the revenue within the business to maintain operations and grow the organization through expansion and plans.
You can learn more about the types of companies by clicking here.
C Corporations and S Corporations
Corporations of this variety are generally large in magnitude and structure, which is why, by definition, C corporations are structured so that the company is taxed as its own entity, separate from its owners who are also taxed. C corporations are structured the way that they are most specifically for U.S. federal income tax purposes. While a C corporation is taxed as its own, individual entity, an S corporation differs in this respect. S corporations have shareholders, and it is the shareholders who are taxed.
When it comes to S corporations, the corporation itself is not subject to taxation. S corporations are also smaller in comparison to C corporations. S corporations have a limited number of shareholders who are residents or citizens. C corporations may be formed without regard to domestic or foreign, or number of shareholders, which is it fits perfectly on a largely structured business. Corporations, when they are formed, are subject to the laws of their respective states and/ or the District of Columbia. When a company such as an S corporation or C corporation actually “incorporates” they are given a certificate of incorporation from the state in which it was formed. Corporations are required by their respective states to have a sort of governing board, and this requires that there be a set of bylaws to which the company adheres.
By the way, McDonald's is an example of a corporation.
LLCs and Non-Profit Companies
Limited Liability Companies, or LLCs, are a blended form of business that intermarries corporate structure and partnership. LLCs are not technically corporations by legal definition but rather a form of a company by legal standards that provides a limited liability as it relates to those in ownership of the company under U.S. jurisdictions which can prove to be broad. Non- profits and LLCs can be closely interchangeable; an LLC does not have to be formed as a business that brings in revenue. A similar type of LLC is formed when it a company that offers medical services, for instance and this form of company is called a Professional Limited Liability Company or PLLC. This also applies to companies that are providing legal services. While non-profit companies may bring in revenue and even have paid employees, they are able to retain their status only by keeping the revenue within the business to maintain operations and grow the organization through expansion and plans.
You can learn more about the types of companies by clicking here.