What is the Difference between C corporation, S corporation and LLC?
Filing Taxes:
- C-Corporation pays taxes on corporate level and the profit transfers to shareholders as a dividend to pay taxes again.
- S Corporation and LLC are pass-through entities and do not pay taxes on a corporate level, profit transfers to shareholders or members, pay taxes to their income tax returns.
- The C Corporation and an S corporation cannot file an election to file taxes as an LLC to the internal revenue service.
- LLC can file an election to the Internal Revenue Service to file taxes either an S Corporation or a corporation.
- Members of an LLC cannot take a salary unless file an election to file taxes either a corporation or an s corporation to the Internal Revenue Service.
- LLC structure is more flexible compared to S and C Corporation.
- C-Corporation is a double taxation; you first pay taxes on a corporate level, later transfer profit to the shareholders to pay taxes.
Management Structure:
- The owners are called members in the LLC.
- The owners are called stockholders in an S Corporation.
- The owners are called stockholders in a C – Corporation.
- Compare to C-Corporation and S-Corporation, you can easily replace the existing owners in the LLC.
Filing Structure:
- The owners file articles of organization to register an LLC.
- The owners file articles of incorporation to register a C-Corporation or an S-Corporation.
- All owners must be either a US residents or citizens to file an election for an S-Corporation to the Internal Revenue Service.
- The USA residents and nonresidents can register a corporation or an LLC.
