4 ms·
>C-corps are fairly uncommon nowadays and for good reason You are almost always going to pay more tax in the C-corp and you will face built in gains issues when
by will_brown 14y ago
>C-corps are fairly uncommon nowadays and for good reason You are almost always going to pay more tax in the C-corp and you will face built in gains issues when you realize this and decide to elect to be an S-corp.
I think you are correct few start-ups and small businesses will ever incorporate and be taxed as a C-Corp. However, there are limitations to the S-Corps, such as a max of 100 shareholders and I think prohibitions foreign shareholders, so any public company is generally going to be C-Corp, the major exception I can think of are publicly traded banks who are N.A.s
- eli 14y agoMy understanding is that a C-Corp also has much simpler paperwork around tax time.
- Nrsolis 14y agoNOPE. C-corp taxes are subject to all sorts of rules. You can't do C-corp taxes on your own except in the most simple of circumstances. You definitely need a CPA (and a good one) if you're going this route.
- swampthing 14y agoIt's not really hard / expensive to find a CPA that can do C-corp taxes, at least in Silicon Valley.
- eli 14y agoI didn't mean so simple you could do yourself; I meant simple compared to S-Corp.
- Nrsolis 14y agoA C-corp and an S-corp are equivalent in all but a few ways: An S-corp is restricted in the total number of shareholders, and the classes of stock. It also can't have retained earnings. That's it. S-corps aren't really popular any longer. Everyone who might have benefited from an S-corp is choosing to form LLCs instead. Less paperwork. Less formality. More flexibility. It's essentially a partnership with the limited liability of a corporation. Heck, even AOL was an LLC for a while.
- deleted 14y ago[deleted]