What are the differences between an S-Corp, C-Corp, LLC and a partnership?

What are the differences between an S-Corp, C-Corp, LLC and a partnership?

S-Corp, C-Corp, LLC, and partnership are different types of business structures that each have their own unique characteristics and benefits. Here is a brief overview of the differences between these structures:

1. S-Corp: An S-Corp is a type of corporation that is taxed as a pass-through entity, meaning that the business’s profits and losses are passed through to the shareholders and taxed at the individual level. S-Corps are subject to certain restrictions, such as a limit on the number of shareholders and the types of shareholders allowed.
2. C-Corp: A C-Corp is a traditional corporation that is taxed as a separate entity. This means that the corporation is responsible for paying taxes on its profits, and the shareholders are also taxed on any dividends they receive. C-Corps offer more flexibility in terms of ownership and structure than S-Corps.
3. LLC: A limited liability company (LLC) is a business structure that combines the liability protection of a corporation with the tax benefits of a partnership. LLCs are taxed as pass-through entities, and the owners, known as members, are not personally liable for the debts and obligations of the business.
4. Partnership: A partnership is a business structure in which two or more individuals or entities come together to conduct business. There are different types of partnerships, including general partnerships, limited partnerships, and limited liability partnerships. Partnerships are taxed as pass-through entities, and the partners are personally liable for the debts and obligations of the business.

Each of these business structures has its own advantages and disadvantages, and the best choice for your business will depend on your specific needs and goals. It is important to carefully consider the pros and cons of each structure and seek the advice of a legal or financial professional to determine the best option for your business.

Prominent Financial Consultants offers a range of services to help our clients succeed, and we would love the opportunity to discuss how we can help you. If you would like to schedule an appointment with us, please schedule a free 15 Minute Financial Clarity Call so that we can learn more about your needs and goals or schedule your tax appointment here.