Corporporation Types

A C Corporation gives control of management to the investors, which is good since the people who are investing their money have a large amount of control. One disadvantage is the large rate at which C Corporations are taxed, even including dividends and investor's individual shares. This also entails double taxation, or additional taxes for management and investors.

In an S Corporation, the shares are sold for capital, and the reward for the shareholders is that their shares are not directly taxed. Also, a person's ownership of stock can extend even past death, which is good since it can be passed to children and ensures its longevity in the hands of investors. Disadvantages include that the company can not sell their stocks to any person/corporation, thus must conforming to IRS regulations.

An LLC lets members essentially set up the style of management they deem best, which gives them primary control over management. Also, there is no tax on shares since income is simply passed within the company. Disadvantages include laws restricting some forms of capital raising, like the selling of all interests, and in certain states, shares may not be perpetual under state law.