Appendix

  C-Corp S-Corp LLC
Tax Double Taxation Federal Corporate tax brackets depending on net income, state and some local corporate tax.  Pass-through Business losses, profits, and expenses flow through the company to the individual shareholders Pass-through Business losses, profits, and expenses flow through the company to the individual members.
The profit is taxed to the corporation when earned and then is taxed to the shareholders when distributed as dividends (qualified lower dividend rate.) Ordinary income tax on wages (including SS and Medicare), but no FICA tax for SS or Medicare for distributions; wages must be reasonable.  Ordinary income tax on net income (including SS and Medicare on all). 
Formation and other formalities File with a state, pay fee, and provide articles of incorporation. Requires holding an initial meeting of directors and shareholders, adoption of bylaws, and recording of minutes; issuance of shares of stock to shareholders; creation of a stock ledger; creation of a corporate book; filing of annual reports; and holding annual and special meetings for shareholders.  File with a state, pay fee, and provide articles of incorporation. Required election of subchapter S with the IRS; drafting of bylaws; holding an initial meeting, adopting bylaws, electing directors, and recording of minutes; creation of a stock ledger; creation of a corporate book; filing of annual reports; and holding annual and special meetings of shareholders.  File with a state, pay fee, and provide articles of organization and entity classification elections with the IRS (minimal formalities), operation agreement not necessary, but recommended.
Duration Survives individual shareholder’s depth or bankruptcy. Survives individual shareholder’s depth or bankruptcy. Membership interest of the decedent ends and only economic interests survive (unless otherwise state in the operation agreement). Single member LLC dissolves with the death of the sole-member.
Limited liability (subject to piercing the corporate veil and other limitations) Yes Yes Yes
Types of Stock Two classes: Common stocks and preferred stocks One class, but can be voting and non-voting stocks. Units of membership, but LLC cannot issue stocks.
Who Shareholders: Anyone Shareholders It is a U.S. corp, no more than 100 shareholders, U.S. citizens and resident aliens, and certain trusts and estates.  Anyone (nonresident aliens, corporations, trusts, partnerships, other LLCs, etc.)
Ability to file for initial public offering Yes Not practicable (limitation on number of shareholders) No
Best suited for Growing profitable companies seeking outside investors Growth companies that may go public in the future, but not there yet, seek to take advantage of tax benefits. Mostly small companies that do not desire the complexity of formalities of C-corps and S-corps.
Profit sharing Flexible profit sharing Profit sharing based on percent ownership. Flexible profit sharing

Events
KU Today