Are you confused about which type of company you need to register? When starting a company, this is one of the challenges that is faced by many people. Knowing what you are likely to benefit is usually a nice way of helping you narrow down the options you have. If you have been toying with the idea of whether to register a C corporation or an LLC company here are some things you might like to know first.
A limited liability company, is one of the more common types of companies registered around the world. Most of those who register limited liability companies do so because of the following reasons.
Multiple Tax Option
Tax is always a tricky issue. If you know it is something that is not exactly your strength, this might be an option. According to the IRS, the LLC companies are not recognized as separate tax entities. As such, one gets three different options in which they can file taxes. These are as a corporation, as partners or as an individual. Read more about corporation vs LLC
Limited Paper work
Secondly, if you know you are not a big fan of paper work, then the LLC is definitely something you need to consider. Compared to other types of companies, the paper work is relatively less, especially when starting.
Aside from all this, you also get protection from liabilities regarding any debts owed by the business.
C Corporation Companies
C Corporations are businesses that are incorporated and thus taxed as different entities. There are a number of reasons why most people prefer C corporations. Here are some of its advantages.
Small business owners can enjoy low tax rates all thanks to C Corporations. The businesses can easily accumulate capital and pay taxes at reduced rates. This is not usually the case with S Corporations or partnership because the taxes are usually quite high. In most cases, people who own partnership businesses and LLC companies pay their taxes using the individual marginal tax rates. This is usually significantly high compared to that of the C Corporations. To learn more about what is a c corporation
, follow the link.
Another benefit is that it is also easy to attract the best employees using C Corporations. This is because most people are drawn to stock. Since it is possible for C Corporations to sell stocks, it becomes easier for them to have the best in the field working for them. This is not usually the case with other forms of companies such as LLC companies and partnership. This particular advantage makes it possible for such corporations to grow because when a company has skilled people in their staff, then productivity tends to go up significantly.