C CORPORATION

A corporation is a prison entity that is owned by its shareholders (owners). Since it is an entity separate from its shareholders, the owners are protected from personal legal responsibility for the money owed and responsibilities of the corporation. C Corporation is the most commonplace shape. C Corp is taxed beneath Internal Revenue Code, Subtitle A, Chapter 1, Subchapter C, except it chooses to be taxed under Subchapter S. C Corps are subject to double taxation: first, C Corp itself is taxed annually on its profits; and 2d, the shareholders are taxed when they get hold of these income as dividends. A California C Corp is taxed on its internet profits at a rate of 8.Eighty four percent; it is also problem to a minimum annual franchise tax of $800. The estimated annual tax need to be paid in 4 installments.

C Corp. Need to adhere to certain formalities in order not to lose its company repute and protections. For instance, it must create bylaws that modify shareholder conferences, outline the scope of directors' authority, and so on.

Pros:

- Generally, no non-public legal responsibility.

- Ownership may be transferred without difficulty thru the sale of stock.

- Corporation survives owners' loss of life.

- Owners can problem and sell stock to traders to raise capital.

Cons:

- More highly-priced to installation and keep than a sole proprietorship or a partnership.

- Possible double taxation.

- Ongoing submitting and reporting requirements.

S CORPORATION

An S Corp is a regular corporation or any enterprise entity, (i.E. A partnership or llc names examples that chooses to be taxable as a corporation), that elects to be taxed underneath Subchapter S of the federal tax code. S Corp isn't taxed at the entity level, and profits glide without delay to the owners. California S Corp is taxed on its net income at a price of one.5 percent. The anticipated annual tax ought to be paid in 4 installments.

Pros:

- Avoid double taxation.

- Generally, no private legal responsibility.

- Generally, survives its proprietors' loss of life.

Cons:

- Can don't have any more than one magnificence of stock.

- Ongoing submitting and reporting requirements.

- One hundred shareholders max.

LIMITED LIABILITY COMPANY (LLC)

LLC combines the favorable tax treatment of partnership with the company defend from non-public legal responsibility. LLC owners' legal responsibility for debts and duties of the LLC is restricted to their economic investment, yet the participants have the proper to take part in management of the enterprise like trendy partners.

In California, for earnings tax purposes, an LLC with more than one member is taxed as a partnership, and an LLC with a unmarried man or woman member is taxed as a sole proprietorship. LLC may also as a substitute to pick to be taxed as a agency via submitting an election on a Form 8832 with the IRS. California taxes the LLC and its proprietors within the same manner the IRS does, similarly to the $800 minimal annual tax for the privilege of doing commercial enterprise within the kingdom. An LLC, whether or not California or foreign, may not render expert offerings.

Pros:

- Easier and faster to shape than a organisation.

- Generally, no non-public liability.

- No double taxation.

- One of the least burdensome company filing necessities.

Cons:

- More complicated to form than different sorts of partnerships and sole proprietorships.

- Ownership can be more difficult to switch for the reason that LLCs do now not difficulty stock.

SERIES LIMITED LIABILITY COMPANY (SERIES LLLC)

Series LLC is one of the latest company forms for grasp LLCs that have subsidiaries that function as impartial LLCs, every being included from liability for the moves of other LLCs. Series LLC can not be shaped in California, but a Series LLC fashioned in every other kingdom can also sign up with the California Secretary of State and behavior business in California. Both Delaware and Nevada allow formation of Series LLCs.

Pros:

- Each unit can be managed independently of others.

- Each unit has own property and liabilities.

- Each unit is included from legal responsibility for the wrongdoings of different units.

- The owners enjoy non-public legal responsibility protection.

- Each unit can be inside the equal enterprise as a master LLC or behavior its own kind of business.

- Units can be shaped and dissolved with the aid of simple amendments to the Operating Agreement, without submitting with the kingdom. Therefore, decreased prison, accounting and administrative prices that would otherwise be incurred through a couple of unconnected LLCs.