How Are S Corporations and C Corporations Different?
Corporations are one of the most common types of business in the world. In fact, most of the world’s largest and most recognizable companies are corporations: Nike, Microsoft, and Coca-Cola are all examples of huge, multi-national corporations. But, unsurprisingly, there are a wide range of different types of corporations, differing by all sorts of characteristics. In the United States, corporations are divided into two types, based on taxation purposes: C corporations and S corporations, so named because of what tax chapter they file under. Corporations are all defined by a certain criteria shared by all such companies, namely: • Corporations are owned by investors, who purchase shares on the stock market. These shares of stock confer a percentage of ownership in the corporation. • Though the corporation is owned by investors, its day-to-day operations are managed by a board of directors, elected by the investors themselves. • The investors have limited liability in the corporation. T
