S-Corp vs C-Corp: Key Differences Explained скачать в хорошем качестве

S-Corp vs C-Corp: Key Differences Explained

Learn the key differences between S-Corp and C-Corp, covering tax benefits, structure, and which one is best for your business. 👉 Get LegalZoom ➜ https://bit.ly/4hRrsem 💥EXCLUSIVE DISCOUNTS AUTOMATICALLY APPLIED💥 ──────────────────────────────────────────── AI Sales and Customer Service Chatbot ➜ https://bit.ly/hmesave 90% DISCOUNT AUTOMATICALLY APPLIED Learn the key differences between S-Corp and C-Corp, covering tax benefits, structure, and which one is best for your business. Timestamp Sections: 00:00 Intro 00:32 Taxes 01:34 Taxes Example 03:24 C-Corp Taxes 04:50 Ownership and Shareholders 05:46 Common Stock 07:46 Operations 10:00 Misc. Differences. 11:56 Differences in Starting One 13:21 LegalZoom 13:56 Setting Up a Corp with LegalZoom 14:46 LegalZoom Pricing and Cost 16:54 My Recommendations 17:20 Recap 18:29 Outro ------------------------------------------------ S-Corp vs C-Corp: Key Tax Differences ------------------------------------------------ S-corps and C-corps differ significantly in taxation. S-corps are pass-through entities, meaning they don’t pay corporate-level taxes. Instead, profits and losses flow through to shareholders, who report them on personal tax returns, avoiding double taxation. Shareholder salaries are subject to FICA taxes, but additional distributions aren’t, offering potential tax savings. In contrast, C-corps face double taxation: corporate profits are taxed at 21% (2024), and dividends are taxed again when distributed to shareholders. However, C-corps can retain earnings for reinvestment without immediate tax impact. ------------------------------------------------ Ownership Structures and Shareholder Rules ------------------------------------------------ Ownership regulations vary between S-corps and C-corps. S-corps are limited to 100 shareholders, must issue only one class of stock, and restrict ownership to U.S. citizens or eligible entities. This structure simplifies management but limits capital-raising potential. C-corps have no shareholder limits, can include various entities (even non-U.S. residents), and can issue multiple stock classes. This flexibility makes C-corps ideal for large businesses seeking significant investment or going public. Preferred stockholders enjoy fixed dividends and liquidation priority, while common stockholders retain voting rights and potential for higher returns. ------------------------------------------------ Operational Formalities and Business Formation ------------------------------------------------ S-corps have simpler operational requirements, making them suitable for small to mid-sized businesses. Shareholders delegate operations to officers without rigid formalities. In contrast, C-corps require a board of directors, annual meetings, and strict adherence to bylaws, ensuring consistency but adding administrative complexity. Both structures involve similar formation steps, such as filing incorporation documents and obtaining an EIN. S-corps must additionally file Form 2553 to elect their tax status. Services like LegalZoom can help streamline the process, from registering the business name to drafting essential documents. Hope you enjoyed my S-Corp vs C-Corp: Key Differences Explained Video.