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Pros and Cons of C-corporation
- Thread starter kkpr
- Start date
bbqchickenrobot
Registered Users (C)
Advantages:
You are personally shielded from any lawsuits against the Corp. Meaning, if your company is sued for wrongful "whatever here" they cannot come and take your house/car/firstborn.
You are able to have "shares" or stock, common and/or preffered, (as opposed to an LLC) so that you can go public via an IPO or a Reverse Merger to acquire growth financing/capital.
Disadvantages:
YOu have to have a yearly meeting in the home place of establishment by each of the board members/founders.
Certain states are more forgiving on laws - look at Nevada and Delaware for a C-Corp.
It generally costs a bit more to file for a C-Corp than an LLC.
You get "double-taxation" on your income as a corporation. Read more about this online.
Those are the basic premises of pros/cons of c-corp. Although, this list is by no means comprehensive. You'll find that these are the issues most cared about.
You are personally shielded from any lawsuits against the Corp. Meaning, if your company is sued for wrongful "whatever here" they cannot come and take your house/car/firstborn.
You are able to have "shares" or stock, common and/or preffered, (as opposed to an LLC) so that you can go public via an IPO or a Reverse Merger to acquire growth financing/capital.
Disadvantages:
YOu have to have a yearly meeting in the home place of establishment by each of the board members/founders.
Certain states are more forgiving on laws - look at Nevada and Delaware for a C-Corp.
It generally costs a bit more to file for a C-Corp than an LLC.
You get "double-taxation" on your income as a corporation. Read more about this online.
Those are the basic premises of pros/cons of c-corp. Although, this list is by no means comprehensive. You'll find that these are the issues most cared about.
Last edited by a moderator:
Dallas03096
Registered Users (C)
Thank you very much for the information.
In order to avoid double taxation I really want to go for an S Corporation. But from most of the postings I found that on EAD I can not have S-Corporation. Is that right?
Thank you
You need to have GC to start S-Corporation. To avoid double taxation, LLC is the way to go.
Stop suggesting incorrect informations.You need to have GC to start S-Corporation.
Dallas03096
Registered Users (C)
GC needed for forming S-Corp
Here is also an extract from http://www.corporate.com/llc-vs-s-corporation.jsp:
An LLC can be owned by any combination of individuals or business entities. Only United States citizens and resident aliens may own an S Corporation .Other entities generally may not own an S Corporation.
Now tell us what is your source for disputing my statement!
My statement that one needs GC before incorporating S-Corp is based on professional opinion I received before I opted for LLC formation in Texas when I was on EAD.Stop suggesting incorrect informations.
Here is also an extract from http://www.corporate.com/llc-vs-s-corporation.jsp:
An LLC can be owned by any combination of individuals or business entities. Only United States citizens and resident aliens may own an S Corporation .Other entities generally may not own an S Corporation.
Now tell us what is your source for disputing my statement!
TheRealCanadian
Volunteer Moderator
Only United States citizens and resident aliens may own an S Corporation .Other entities generally may not own an S Corporation. Now tell us what is your source for disputing my statement!
One can be a resident alien for tax purposes without having a GC.
Lot of people forget that there are two different entities in US for immigrants. One is CIS & IRS. Paychecks, Credit Cards, Bank Accounts, IRA's, 401K's, Businesses and lot more come under IRS regulations. I saw a lot of places in this business forum giving wrong information about starting an S-Corporation.
Professionals such as lawyers/CPA's may not understand the true meaning of residents. I have a lot of people who hod an S-Corporation on EAD.
Please see the beolow link for more info.
http://immigrationportal.com/showpost.php?p=1264689&postcount=17
So save your money by starting S-Corp instead of getting double taxed with C-Corp.
Professionals such as lawyers/CPA's may not understand the true meaning of residents. I have a lot of people who hod an S-Corporation on EAD.
Please see the beolow link for more info.
http://immigrationportal.com/showpost.php?p=1264689&postcount=17
So save your money by starting S-Corp instead of getting double taxed with C-Corp.
Dallas03096
Registered Users (C)
I know I was a resident alien for tax purposes when I was on EAD. But whether that was good enough for starting a S-Corp or a GC is required was the question!Lot of people forget that there are two different entities in US for immigrants. One is CIS & IRS. Paychecks, Credit Cards, Bank Accounts, IRA's, 401K's, Businesses and lot more come under IRS regulations. I saw a lot of places in this business forum giving wrong information about starting an S-Corporation.
Professionals such as lawyers/CPA's may not understand the true meaning of residents. I have a lot of people who hod an S-Corporation on EAD.
Please see the beolow link for more info.
http://immigrationportal.com/showpost.php?p=1264689&postcount=17
So save your money by starting S-Corp instead of getting double taxed with C-Corp.
Your link still shows that there were 2 schools of thought and there was no conclusion!
Every small business person considers whether or not to incorporate his business at some point. The main advantage to incorporating is the limited liability of the incorporated company. Unlike the sole proprietorship, where the business owner assumes all the liability of the company, when a business becomes incorporated, an individual shareholder's liability is limited to the amount he or she has invested in the company.
C corporations are separately taxable entities. C corporations file a corporate tax return reporting profits or losses, and any profits are taxed at the corporate level. C corporations face the possibility of double taxation when profits are distributed to shareholders in the form of dividends, as the shareholders must report dividends as personal income and pay tax on them at the individual level.
S corporations are pass-through tax entities.
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C corporations are separately taxable entities. C corporations file a corporate tax return reporting profits or losses, and any profits are taxed at the corporate level. C corporations face the possibility of double taxation when profits are distributed to shareholders in the form of dividends, as the shareholders must report dividends as personal income and pay tax on them at the individual level.
S corporations are pass-through tax entities.
I recommend you to hire professionals like clickandinc.com/ because it doesn't cost much and the process become easier..