質問
What exactly is the difference between the different types and which is most suitable for a startup? Is one more expensive to incorporate than the other?
I have read that most VCs prefer C-Corp. Why is that and does that then pretty much settle the question?
回答: 2 public & 0 非公開
A limited liability company is owned by members. These members can either jointly run the company, appoint a committee to run the company or can appoint a manager to run the company. Depending on state law, there can be relationships of various complexity between managers. An LLC can be taxed as a pass-through entity, this means that earnings (or losses) of the LLC pass directly from the LLC to the corporation without a separate layer of taxation.
A corporation is a business entity that is owned by shareholders. The shareholders elect a board of directors and the directors hire officers that run the day to day business. This precise arrangement varies by business and, to a certain extent, state law. The earnings of the corporation are taxed and then if the corporation pays those earnings out as dividends then they are taxed again. Sometimes this is called double taxation.
Either an LLC or a corporation can elect to be taxed under Subchapter S of the Internal Revenue Code (26 USC 1361 et seq.). To be eligible for this election, the number and kind of shareholders are limited and those limitations may disturb your venture capital firm. If Subchapter S election is made, each officer is paid a wage and a distribution. The former is subjected to employment taxes and the latter is generally not.
For the sake of brevity, I have grossly over simplified the features of these entities. Your individual situation probably requires a more detailed analysis with a more comprehensive factual profile of your situation. If you reach out to me, I would be happy to advise your firm if you are in a state in which I am barred.
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