Difference between an s-corporation and a c-corporation

Reference no: EM13318526

A primary difference between an S-corporation and a C-corporation is that:

a. the C-corporation offers the advantage of limited liability to its stockholders, and an Scorporation does not.

b. the C-corporation itself pays taxes based on a corporate tax structure, and the Scorporation passes all of its profits (or losses) through to its individual shareholders where they are taxed at the individual rate.

c. the founders of an S-corporation are protected from the potential loss of control that occurs when the founders of C-corporations sell shares of stock to raise the capital needed for growth.

d. S-corporations are much easier and less expensive to form than C-corporations, which require their founders to file a certificate of incorporation with the state and to pay incorporation fees.

Reference no: EM13318526

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