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Find out how forming an LLC and other types of corporations can help you as a business owner in terms of your liability and taxes.

Limited Liability Company

The Limited Liability Company (LLC) is thought to be one of the best business structures for smaller companies for a number of reasons. Creating an LLC is usually not very expensive, and it is easier to run than other types of corporations.

Most of the time, C Corps and S Corps offer LLCs to business owners. In a similar way, LLC owners tend to have limited liability as well. So, if a business is responsible for something, it is only responsible for that business. It has nothing to do with any other business in the market, nor does it affect the personal assets of any other business.

Also, an LLC doesn't have to pay federal income tax. LLCs are eligible for "pass-through" taxation, which means that the company's income taxes are shown on each owner's tax return, not on the business's tax return.

S-Corporation

It is a dream come true to watch your new businesses grow and mature over time. But as your business grows, the tax rate tends to go up as well.

Tax time can be hard for businesses that are growing quickly. It is especially important for them to start S Corporation at this time. When tax time comes around, this corporation is very helpful for small businesses.

C-Corporation

A C Corporation is also well-known as a business set up and run on a national scale. It is one of many legal ways to tell the difference between the official and regulatory reason and the tax business. This corporation is a different way to own a business than Limited Liability Companies (LLCs), S Corporations, Sole Proprietorships, and others.

The C Corporation may want to give some of the company's profits to shareholders in the form of bonuses. A C Corp is a separate legal entity, so the liabilities of the business are not the same as those of the directors, investors, and shareholders.

Non-Profit Corporation

The only goal of a non-profit corporation is not to make money, which is a very different goal. It works in a different way than an LLC, an S-Corp, or a C-Corp. This company's only goal is to help the people who work there by sharing the profits with them. Not even one penny is given to the shareholders.

As was already said, the Non-Profit Corporation is mostly used to pay the salaries of the people who work for the corporation every month.

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