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Diffrence Between C Corporation And S Corporation

Asked by: Narender Pal Singh - 6 October, 2013 Sir,

What Is the Diffrence Between C Corporation And S Corporation
Answered by: Ray Albert - 7 October, 2013 Dear Narender,

The main difference between 'C' and 'S' Corporation is the tax structure. A C-Corporation generally pays income taxes on the company income, then pays its shareholders dividends, which they pay personal income taxes on. This is commonly referred to as 'dual-taxation'.

An S-Corp is a pass-through entity similar to an LLC. This means the company does not pay corporate income taxes, instead passes the income through the entity to the owners, and they pay personal income taxes on that income. S-Corp is limited to 100 shareholders, all of whom must be physical U.S. persons (with a few exceptions).

You can click here for a side-by-side comparison of the different entity types.


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