Types of Corporations
There are many types of Corporations that business people might choose, to become a business entity that will receive greater respect in the Corporate world of business and finance. The level of respect will be proportionate to the types of corporations that they form. They could become a Limited Liability Company, a C Corporation, S Corporation a Professional Corporation or a Non-Profit Corporation.
If they choose to become a Limited Liability Company, they will have the respect of foreigners because an Limited Liability Company can have shareholders that not U.S. citizens. Foreign investors can reap the tax benefits that are offered to owners of a Limited Liability Company, since a Limited Liability Company is not threatened by a double taxation rule because it is not a separate entity that is taxable.
A Limited Liability Company will gain lots of respect because it is one of the types of Corporations that is a recognized business structure in all of the 50 States, and small business owners are becoming very interested in these types of corporations because they will get more respect than they would being a sole proprietorship.
These types of corporations offer small businesses the tax advantages of a corporation and the flexibility of a partnership, and this mixture is very attractive to small business owners who want to protect their assets and get more money for loans. For the sole proprietor, they view a Limited Liability Company as a win, win opportunity.
A C Corporation is one of the types of Corporations that stands on its own principles. They gain respect because they are considered unique, and are a entity in their own right from the people that actually own it. The C Corporations feel that they must protect themselves from being sued by everyone, and know they will be taxed by everyone, including their own shareholders.
It is the C Corporations that know they will not be dissolved, even if a new owner is found. They know that they can have as many stockholders as they want, and they can always raise funds by selling their stock. The C Corporations feel quite a bit safer than those people that form a Limited Liability Company, because they are less likely to get audited by the Government.
The S Corporations are very special indeed, but the S does not stand for special, it is just a quick way of saying that their business organization is a subchapter of a corporation. In these types of corporations, there are special tax status benefits that can be derived by stockholders, and they can transfer their earnings from the Corporation directly to the income reported on their tax return.
by Nathan.Smarty 19 years ago