C Corporation (Inc or Ltd)
There are no restrictions on the shareholders nationality of C corporations
S Corporation shareholders must be US citizens and are restricted to 100 shareholders.
The IRS classifies Corporations according to how they want to be taxed, there are two types of Corporation:
- C Corporations, named after Subchapter C of the tax code, or
- S Corporations, named after Subchapter S of the tax code
Features of a C Corporation
- Incorporated at state level - we specialise in Nevada, Delaware, Florida and Wyoming
- Treated as a separate and distinct entity from the shareholders
- Corporations offer the ability to sell ownership shares in the business through stock
- Most states allow one individual to hold all offices - director, shareholder and officer - called a close corporation
Advantages of a C Corporation
- Limited Liability - Shareholders’ personal assets are protected.
- Ability to Generate Capital - Corporations have an advantage when it comes to raising additional capital - the ability to raise funds through the sale of stock.
- Corporate Tax Treatment - Corporations file taxes separately from their owners. Owners of a corporation only pay taxes on corporate profits paid to them in the form of salaries, bonuses and dividends while any additional profits are awarded a corporate tax rate, which is usually lower than a personal income tax rate.
- Attractive to Potential Employees - Corporations are generally able to attract and hire high quality and motivated employees because they offer competitive benefits with the potential for partial ownership through stock options.
The bylaws of a Corporation are an internal document that contains rules for holding corporate meetings and carrying out other formalities according to state corporate laws. The corporate Bylaws are created solely for the Corporation and it’s shareholders and do not need to be filed with the State.
There are no citizenship or residency requirements for the ownership of a C Corporation.
Incorporating a C Corporation
A Corporation is formed under the laws of the state in which it is registered. For corporations, your legal name is the one you register with the Companies Division in the state. Corporations must include, at the end of the business name - Corporation, Incorporated or Limited.