C-Corporation
Most new companies choose to form a c-corporation. This is the most popular type of new company formed in California and most other states. The reason for this is c-corporations are set up to be flexible and to grow easily. C-corporations can give liability protection to their founders and the people who work there.
For more information, see our article on how to form a c-corporation. Or, click here to form a c-corporation in California.
S-Corporation
An S-Corporation has some advantages over a C-Corporation, but it's not for everyone. One problem with a C-Corporation is that you get taxed twice; the corporation gets taxed on its income, and then the owners and employees get taxed on their own income. An S-Corporation only gets taxed once. On the other hand, an S-Corporation has limited ownership. It may be a better choice if you know that your company will always be small and be owned by a small group of people.
Need to form an s-corporation in California or another state? PCF can help. If you've already formed a c-corporation and want to switch, PCF can help you with S-Corp Election. If you need more information, see our article on how to form an s-corporation, or see the differences between a c-corp and an s-corp.
Limited Liability Company
A limited liability company, or LLC for short, is a company formally recognized by the state but it is not a corporation. While a corporation is owned by stockholders and run by a board of directors and corporate officers, an LLC is owned by partners and run by partners. The advantage of an LLC is if one partner makes a mistake and gets sued, the other partners will not be personally liable. Because of this, LLC's are popular with small groups of professionals who want to pool their resources, like doctors and lawyers.
Click here to form an LLC in California, or click here to form an LLC in another state. For more information, see our article on how to form an LLC.
Non-Profit
A non-profit is a company that does not intend to make a profit. Most non-profits are run for special purposes, like charity, or to help the environment. A California non-profit is actually a type of corporation, but is formed differently from a normal corporation.
Non-profits are also special because they can apply for tax exemption. This is often known as 501(c)(3) qualification, based on the federal law governing non-profits and tax exemption. Just because you're a non-profit doesn't mean you're automatically tax exempt! PCF can help you form a tax-exempt non-profit in California. Want to form a non-profit in another state? Give us a call.
Click here to form a California non-profit. For more information, see our article on how to form a non-profit or our article on 501(c)(3) tax exemption. |