Currently in :

LLC vs S Corp vs C Corp

llc-s-corp-vs-c-corp

LLC vs S corp vs C corp: Which Is Better for Your Business?

To execute and scale your business idea, you have to first organize it in a business structure. The right kind of business structure could decide the success and failure of your efforts. Every state has different kinds of business structures that suit different circumstances and business needs, including LLCs, Sole proprietorships, SCorps, NPOs and CCorps. Some of the most common incorporation structures are LLC, S corps and C corps, and each has very different characteristics, and it's important to understand them before you make a decision on how to incorporate your business.

Table of contents

Pros and cons LLC vs SCorp vs CCorp...Read more

How does ownership work in an LLC, S corp or C corp?...Read more

How does an LLC, S corp and C corp work?...Read more

Taxes in an LLC, S corp and C corp...Read more

Pros and cons LLC vs SCorp vs CCorp

The basic definition of an LLC is a legal entity where personal assets like the partners' houses, properties and stocks are protected if the company suffers a loss. This is what's meant by LLC, or limited liability company. It protects the owners of the company against the company's liabilities and debts. For example, if the company is sued by an external party and is directed by the court to cover damages, the company's partners are immune to any liabilities. So, if the company cannot pay the damages, the partners are protected and can't be pursued to pay for any liabilities and debts with their assets. An LLC is a hybrid partnership but has some features of a corporation regarding liabilities. We could say that an LLC is much closer to a corporation than a partnership, but a limited liability company is much easier to establish. An S corporation or S corp has some similarities to an LLC. For example, the owners of an S corp get pass-through income like in an LLC and the owners' personal property is protected against business liabilities. An S corp has more credibility because it comes with more oversight, thanks to its board of directors. It's mandatory to have a board of directors in an S corp that looks over the management and balance sheets of the company. You can have up to 100 shareholders in the company, which get paid dividends or cash payments from profits. In an S corp, also known as the S subchapter, it's possible to have a hybrid business. For example, a company can work as an LLC and an S corp, with you having the freedom to choose things like whether the company is taxed as an S corp or LLC, depending on the amount of your tax bill. In an LLC vs S corp comparison, the latter has a much longer list of regulations as per the IRS. A C corp, also known as a C corporation is a type of business structure wherein the business owners are taxed separately from the business entity. You could say it's the upgrade from an LLC or S corp. However, a C corp is also liable to pay corporate income taxes. So in a C corp, the owners also pay personal taxes, while the corporation pays corporate taxes. Like an S corp or LLC, a C corp protects its owners from the company's assets and liabilities.
Pros and cons LLC vs SCorp vs CCorp

Quick tip

If you are looking to upgrade your company from an LLC to an S corp because of tax bills, you can simply file your taxes as an S corp.

Back to top

NPO

NPO

The benefits of incorporating as a nonprofit.

Share
Business Corporations

Business Corporations

The pros and cons of different ways to incorporate your business.

Share
LLC Vs S-Corp Vs C-Corp

LLC Vs S-Corp Vs C-Corp

LLCs vs S corps vs CCorps: find out which is right for your company.

Share
S Corp

S Corp

Find out if forming an S Corporation is the right fit for your business.

Share
C Corp

C Corp

How C Corps, the most popular business structure, works and how it might be right for your business.

Share
LLC

LLC

Learn about the advantages for choosing an LLC over other business structures.

Share
Sole Proprietor

Sole Proprietor

Are you an individual business owner? Here’s why a sole proprietorship could be useful to you!

Share
Partnership

Partnership

Partnerships are a great way to create a team of like-minded people to meet business goals. Learn everything about partnerships!

Share
NPO

NPO

The benefits of incorporating as a nonprofit.

Share
Business Corporations

Business Corporations

The pros and cons of different ways to incorporate your business.

Share
LLC Vs S-Corp Vs C-Corp

LLC Vs S-Corp Vs C-Corp

LLCs vs S corps vs CCorps: find out which is right for your company.

Share
S Corp

S Corp

Find out if forming an S Corporation is the right fit for your business.

Share

Back to top

How does ownership work in an LLC, S corp or C corp?

Ownership works differently in every kind of business structure. Here's how it works in the most common three corporate structures. An LLC allows you to have an unlimited number of owners. Also known as members, the owners can be U.S. citizens, non-US citizens or even non-US residents. An LLC can also have another business as a member. LLCs require significantly less paperwork than an S corp or C corp. An S corp can have as many as 100 shareholders. S corps are not as flexible as an LLC, and there are a number of restrictions regarding ownership. For example, a company cannot own an S corp; only individuals can. This means that other S corps, C corps, NPOs, sole proprietorships and partnerships can't have ownership stakes in an S corporation. A C corporation can have an unlimited number of shareholders/investors. Those shareholders vote on the board of directors in a C corp.
How does ownership work in an LLC, S corp or C corp?

Back to top

How does an LLC, S corp and C corp work?

The LLC model is the least complex of the lot, followed by an S corp and a CCorp. But each serves different needs.
How does an LLC, S corp and C corp work?

How an LLC operates

How an S corp operates

How a C corp works

Back to top

Taxes in an LLC, S corp and C corp

All three business structures have different taxation models intended to fit businesses of varying size.

Taxes in an LLC

Taxes in an S corp

Taxes in a CCorp

Back to top

What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. to find every possible tax deduction. Then, the CPA team files a guaranteed 100% accurate tax return for you – to save you a couple of thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
Pondering Businesswoman

Need help navigating your taxes?

FlyFin's A.I. and 24/7 CPA support will guide you.

Get Started

Is this article helpful for you?
Yes
No