If you’re thinking of starting a small business, one of the first questions you have to answer is what type of legal structure you’ll use. In most cases, the best choice is to form a corporation—but there are several different types of corporations that you can choose from. Let’s take a look at the various types and see which one might be right for your business.

The C Corporation 

The C Corporation (or “C Corp”) is the most common type of corporation in the United States. It offers limited liability protection to its owners, meaning that their personal assets cannot be taken if the company faces financial trouble or legal action. C Corps are taxed separately from their owners, so they can potentially save on taxes by taking advantage of certain deductions and credits. The downside is that any profits made by the company will be subject to double taxation, as both corporate income tax and individual income tax must be paid on those profits.

The S Corporation 

The S Corporation (or “S Corp”) is similar to a C Corp but offers some additional benefits. Like a C Corp, it provides limited liability protection and separate taxation for its owners; however, S Corps are only subject to one level of taxation—the individual income tax—which means that profits made by the company will not be subject to double taxation like they would with a C Corp. Another advantage is that losses incurred by an S Corp can also be written off on individual taxes as well as being used against future corporate profits.

The Limited Liability Company (LLC) 

A Limited Liability Company (LLC), unlike a corporation, does not offer separate taxation for its owners—instead, all profits and losses are passed directly to them and reported on their individual tax returns. This means that LLCs don’t pay taxes themselves; instead, their owners do. LLCs also offer more flexibility when it comes to how they are managed compared to other types of corporations; instead of having board meetings and shareholders voting on decisions, LLCs usually just require agreement among all members in order for decisions to be made. This makes them popular among small businesses because they provide some degree of flexibility in terms of how decisions are made while still providing limited liability protection for their owners.

Ultimately, deciding which type of corporation is right for your business depends on many factors—including size, ownership structure, goals, and risk tolerance—so it’s important that you research each option carefully before making your decision. That said, understanding the differences between these different types can help you make an informed decision about your business’s future and ensure that it gets off on the right foot!