There are two main types of Corporations: S-Corporations and C-Corporations. The C-Corporation is the traditional type of Corporation and is exampled by companies such as Target, UnitedHealth Group, and 3M. S-Corporations are rarer, but have some advantages. If you are considering incorporating your business as an S- or C-Corporation, the most important differentiating factor between them comes in the form of ownership and, subsequently, taxation.
C-Corporations can be owned by thousands to hundreds of thousands of owners, which is desirable to the business when wanting to offer new shares and to owners when wanting to sell shares. S-Corporations are limited to 100 owners maximum, however, and each owner must be an actual person (not another business). There are many different taxation issues that result from this difference, which affect how often profits are taxed and the stock structure. It is often beneficial to consult legal counsel and CPAs when attempting to make the decision between incorporating as a C- or S-Corporation.
Whether an S- or C-Corporation is most applicable to you, you can expect to always receive the following advantages while using a corporate legal structure:
- Limited liability for owners, which protects them from the debts and liabilities of the business, including lawsuits
- Boards of directors and senior officer positions that are governed by articles of incorporation and other agreements you may institute
- The ability for the business to make decisions independent of owners
Contact a Minnesota Incorporation Attorney
At Vlodaver Law Offices, LLC, we want to see you succeed, which is why we want to help you make the process of establishing your business or changing your structure as easy as possible. We work on a flat fee basis so you do not have to worry about hidden fees and spiraling costs. If you wish to establish a business as a Corporation or you wish to change your business structure so you receive certain benefits, we can help you. We will work closely with your CPA and all players within your business to ensure that your legal and financial needs are met. Contact us for a free consultation.