Selecting the best business structure for your company is a common issue. Let us help you understand the difference between S-Corps, LLCs, and Corporations.

1. LLC vs. Corporation vs. S-Corp
By : Raad Ahmed
April 2015

2. C-CORP, S-CORP, LLC
A JOURNEY THROUGH INCORPORATION

3. BROUGHT TOYOU BY
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4. SOYOU HAVE A TEAM OF FOUNDERS

5. ANDYOU’RE BUILDING SOMETHING GREAT

6. BUT NOW IT’S TIME TO START SELLING IT…

7. TIME TO INCORPORATE!

8. IT’S QUITE SIMPLE…

9. STEP 1: CHOOSE A LEGAL STRUCTURE
Meaning setup an entity that will conduct business with other entities

10. THERE ARE 3 POPULAR CHOICES

11. S-CORPORATION
A standard corporation with a special tax status,
limited number of shareholders and limited liability for the owners
That sounds promising…

12. C-CORPORATION
A standard corporation with unlimited number of shareholders and
limited liability for the owners

13. KEY DIFFERENCES
S-CORPORATION C-CORPORATION
TAX PASS-THROUGH TAXES PAID BY THE C-CORP
OWNERS PAY TAXES FOR THE S-CORP C-CORP PAYS TAXES FOR ITSELF
LIMITED NO. OF SHAREHOLDERS UNLIMITED SHAREHOLDERS
S-CORP IS LIMITED TO 100 SHAREHOLDERS
SINGLE CLASS OF STOCK MULTIPLE STOCK CLASSES
S-CORP CAN ISSUE ONLY 1 CLASS OF STOCK C-CORP CAN ISSUE UNLIMITED NO. OF CLASSES
NO STOCK OPTIONS FLEXIBLE STOCK OPTIONS
S-CORPS CAN’T GIVE OUT STOCK OPTIONS C-CORPS HAVE FREEDOM IN ISSUING
EMPLOYEE STOCK OPTIONS

14. C-CORP IS THE MOST POPULAR CHOICE
AMONG STARTUPS

15. LIMITED LIABILITY COMPANY
A company with limited liability of it’s owners and simple accounting
schemes, but also with limited privileges in civil procedures
LLC is usually avoided by
investors and the
majority of startups

16. SO WHICH STRUCTURE IS BEST FOR ME?

17. THERE IS NO DEFINITIVE ANSWER
BUT THIS MIGHT HELP…

18. STEP 2: SEEK HELP FROM A LAWYER
It’s possible to do it yourself, but it’s a smart choice to include a lawyer in the process

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