American Incorporators Ltd.

Which entity should I use to set up my business?

C-Corporation S-CorporationLLC

When starting a business, there are a number of choices to make.

One of the first is how to incorporate.

It can seem daunting in the beginning, but with a few pointers from American Incorporators you'll have a better feel for formation.

C-Corporation

The ScoopUsed widely by the big boys, but also by smaller and medium-sized businesses desiring an unlimited number of shareholders.

C-Corporation

Sets you up for success if you are:

- Seeking venture capital- Taking on equity investors - Plan to be a publicly traded company in the future

Pros

Cons

C-Corporation

More paperwork than LLCs

The potential to have both profits and dividends taxed - the dreaded "double taxation"

Limited Liability Company

The ScoopGenerally, the Limited Liability Company (LLC) is the most popular type of incorporation for small businesses.

LLC

Limits personal liability for business debts and agreements

A pass-through entity for tax purposes

Fewer requirements around corporate meetings and formal paperwork

Not setup for raising venture capital and equity

Pros

Cons

LLC

S-Corporation

The ScoopCommon among all sizes of businesses, the S-Corporation option sets a cap of 100 shareholders.

S-Corporation

Avoid double taxation

Pass-through profits or losses to shareholders to include on individual tax returns

Flexibility to advance to C-Corporation at a later date

There are limits on shareholders and stock restrictions that come with an S-Corp formation

Your business must meet certain requirements to qualify

Pros

Cons

S-Corporation

American Incorporators Ltd.

Start your company, fulfill your dream

For more formation options, visit American Incorporators at ailcorp.com.

Or consult a specialist by phone at 1.800.441.5940.