- C Corporation- C Corporations (C-Corp) are separate legal entities. It is responsible for paying corporate taxes at entity level & holding annual general meeting. It must also appoint board of directors. If you are planning to raise investments in future, it is better to opt for C Corp. Further, as a foreign owner, C Corps are best to incorporate.
- S Corporation- S Corporations are typically for small businesses. It gives the benefits of partnerships as members are taxed on their proportionate share in S Corp. Further, there are some limitations in S Corp which are as follows:
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- S Corp are limited to only 100 shareholders.
- It can issue only 1 class of stock.
- Only US citizens are permitted to incorporate S corps. Foreign shareholding & ownership is not permitted in S corps.
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