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Compare Business Entity Types

LLC
C-Corp
S-Corp
Non-Profit

Protection

Yes
Yes
Yes
Yes

Managing your business

Yes
Yes

Varies
Yes
Yes
Yes

Varies
Yes
Yes
Yes

Yes
Yes
Yes
Yes

Varies
Yes
Yes
Yes

Tax

Yes
Yes

No
Yes
Varies

No
Varies

State filing fee

Yes
Yes
Yes
Yes

Varies
Yes
Yes
Varies

Business Structures Comparison

A side by side comparison of Corporations, LLCs, and Non-Profits

Limited Liability Company

LLCs have quickly become a popular business structure due to their unique combination of asset protection ability and simplicity. The main benefits include:

  • The limited liability protection afforded to business owners
  • Minimal compliance requirements & flexible profit distributions
  • Zero ownership restrictions
  • And the same pass through taxation structure as S corporations

Some of the drawbacks of LLCs include:

  • The need to pay self-employment taxes and keep detailed personal records

Nonprofit Corporation

Non-profits are a great business structure for organizations seeking to change the world. Beyond the impact you can have on your chosen mission, the main benefit of forming a non-profit is the tax-exempt status of such a corporation. Other benefits include:

  • All charitable donations made to your business will be tax-deductible
  • Founders and members are generally not held responsible for a nonprofit’s debts
  • Non-profits also receive discounts on postage and advertising rates

However, because they exist to serve the public, non-profits are under much greater public scrutiny and are held to high standards of organization, reporting, and record keeping. 

The Corporation

A C corporation is a business structure most well suited for the largest businesses. The main benefit of filing as a C Corp is the separation of owners and the business itself. There are many other advantages as a result, including:

  • Reductions in personal liability for any debts accumulated by the business
  • The power to raise funding by selling stocks
  • Increasing the credibility of your business
  • The option to transfer ownership easily
  • The ability to deduct benefits such as employee health insurance

Disadvantages of this type of corporation include:

  • Increased number of rules, regulations, and requirements which must be constantly upheld
  • Due to the unique tax structure of a C corporation, “double taxation” may occur.

The S-Corporation

An S corporation is similar to a C corporation but for smaller businesses, such as a family owned organization. One of the main benefits of this particular structure comes again in the form of limited personal liability. However, additional benefits for many smaller businesses come in the form of different tax organization, including the following:

  1. Pass-through taxation, which allows you to pay taxes below the corporate level
  2. Salary and Dividend payment which also results in a lower tax bill as you can split the income from your corporation.

S Corps also offer other benefits, including:

  • The separation of personal liability from that of the business. Your own liability will be equal only to the value of an owner’s investment.
  • Simpler operating guidelines than C Corporations
  • And asset protection, which shields your personal assets from litigation, business creditor claims, and contracts. 

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