Find out which business entity type is best for your small business: an s corporation, c corporation, or llc.

1. Choosing
between
an SCorp,
CCorp, or LLC
© 2015, Wolters Kluwer Corporate Legal Services. All rights reserved.
SCorp
CCorp
LLC

2. THIS IS NOT INTENDED TO PROVIDE LEGAL,
ACCOUNTING OR OTHER PROFESSIONAL
ADVICE AND SHOULD NOT BE RELIED UPON AS
SUCH. THIS IS NOT A SUBSTITUTE FOR
THE ADVICE OF AN ATTORNEY.
CONSULT YOUR ADVISOR.

3. Choosing Between an LLC, S Corporation (S Corp)
or C Corporation (C Corp) is an Important Step
There is no “One Size Fits All” type of entity that is best
for every unique business owner.
An LLC, S Corporation (S Corp) and C Corporation (C Corp)
each have advantages and disadvantages that are
important when:
– Persons starting a business are choosing between a
Corporation (which could be either an S Corp or C Corp)
or an LLC
– Owners of a current Sole Proprietorship or General
Partnership decide to incorporate or form an LLC or a
Corporation (either S Corp or C Corp)
These advantages and disadvantages affect the company
and its owners throughout the company’s entire life cycle.
SCorp
CCorp
LLC

4. Popular Business Forms
Business Type Breakdown
Popular choices when incorporating
or forming a business entity:
n Limited Liability Company (LLC)
n C Corporation (C Corp)
n S Corporation (S Corp)
Owners who have not yet incorporated
or formed a business entity are
referred to as:
n Sole Proprietorship
n General Partnership

5. Sole Proprietorship (1 Person)
Sole Proprietorship
Advantages
n Easy to start: No state filings required to
start (but may still need Business License
or DBA filings)
n Does not require a separate tax return
Sole Proprietorship
Disadvantages
n Owner has unlimited personal liability for
business debts
n Obtaining capital can be more difficult
n Can have only one owner
Business Type Breakdown
Read more information on sole proprietorships.

6. Business Type Breakdown
General Partnership (2+ Persons)
General Partnership
Advantages
n Easy to start: No state filings required to
start (but may still need Business License
or DBA filings)
n Created “automatically” when two or more
people or businesses engage in a business
enterprise for profit. Can be started with a
verbal agreement or handshake
General Partnership
Disadvantages
n Owners are subject to unlimited personal
liability for business debts
n Obtaining capital can be more difficult
n Individual partners bear responsibility for
actions of other partners
n Poorly organized partnerships and oral
partnerships can lead to disputes
among owners
Read more information on general partnerships.

7. Limited Liability Company (LLC)
LLC Advantages
n Increased credibility for the business
n Limited liability
n Pass-through taxation (but could elect
otherwise)
n Flexibility in management structure
n Flexibility in allocating profits
LLC Disadvantages
n Ownership may be harder to transfer
n Relatively newer type of entity (established in
1980s and 1990s in many states), not as much
case law
Business Type Breakdown
Read more information on LLCs.
GREATER
FLEXIBILITY
LLC

8. S Corporation (S Corp)
S Corporation Advantages
n Increased credibility for the business
n Limited liability
n Pass-through taxation
n Self-employment tax advantages
n Raise capital more easily
S Corporation Disadvantages
n IRS-imposed restrictions, for example:
– Earnings distributed proportionately to capital
contributions
– Only one class of stock (but differences in
voting rights among shares of common stock
are permissible)
– “100” or fewer shareholders
– Shareholders must be individuals (or estates or
certain trusts or certain organizations)
– Shareholders cannot be nonresident aliens
n Relatively greater state-imposed filing
requirements and ongoing formalities
n Some states require a state-level filing for S Corp
status to be recognized. State tax rules may differ
Read more information on S Corporations.
Business Type Breakdown IRS RULES
S Corp

9. C Corporation (C Corp)
C Corporation Advantages
n Increased credibility for the business
n Limited liability
n Easy transfer of ownership
n Raise capital more easily
LLC Disadvantages
n May incur double taxation on corporate
profits
n Relatively greater state-imposed filing and
ongoing formalities
Read more information on C Corporations.
Business Type Breakdown
C Corp
RAISE CAPITAL
MORE EASILY

10. Does My LLC,SCorp
or CCorp Need a
RegisteredAgent?
?
REGISTERED
AGENT

11. Does My LLC, S Corp or C Corp Need a Registered Agent?
LLCs, S Corps and C Corps
All Need a Registered Agent
Each must have a Registered Agent throughout
the lifetime of the company.
n Registered Agent Definition: A Registered Agent is an agent appointed
and maintained by a business entity, such as an LLC or S Corp or C Corp, for the
purpose of receiving official notices and service of process on the business entity’s
behalf in a particular state. A Registered Agent must have a location in that state
where it may be served. This location is the business entity’s Registered Office. The agent’s
name and location are “registered” and kept on file with the state business entity filing office.
n Part of Incorporation Process: Incorporating or forming an LLC, S Corp or C Corp involves designating
a Registered Agent for the company. The Registered Agent is designated on theArticles of Organization
(or Certificate of Organization) or on theArticles of Incorporation (or Certificate of Incorporation or Charter).
n Part of Foreign Qualification Process: Designating a RegisteredAgent is also part of the process when registering
to do business in other states (called Foreign Qualification).
n Update State Records for Changes: If the registered agent or registered office changes, it is important
to update state records.
Read more information on S Corp, C Corp or LLC Registered Agent services.
REQUIRED!
REGISTERED
AGENT

12. Registered Agent: Official Point of Contact
for an LLC, S Corp or C Corp
The Registered Agent receives state notices & official documents, service of process (SOP),
wage garnishments and other important information.
Note: These documents often have time-sensitive deadlines.
A registered agent should:
n Always be physically present at registered office
during normal business hours
n Have expert knowledge in business entity and
compliance rules for LLCs, S Corps, C Corps and other
types of business entities
n Have trained professionals on staff who know how to
expertly manage receipt of various notices, forms and
documents
REGISTERED
AGENT
physically
presenttrained
professionals
expert
knowledge
Does My LLC, S Corp or C Corp Need a Registered Agent?

13. Failing to have a Registered Agent
could lead to:
n Penalties, judgments against a company
without it even having a chance to defend itself
n Losing the right to bring legal claims
n LLC, S Corp or C Corp revoked
(no longer can do business in other states)
n LLC, S Corp or C Corp dissolved
(no longer exists)
Does My LLC, S Corp or C Corp Need a Registered Agent?

14. Professional Registered Agent Services
Having a professional Registered Agent helps a company
keep its good standing status with the state
A professional Registered Agent typically offers:
n Automated Monitoring Tools
n Business Alerts
n Monitor and Tracking
n & More
A professional Registered Agent may also offer:
n Digital Millennium Copyright Act (DCMA agent) services
n Federal Motor Carrier Act (FMCA) services
n Private contracts and agreements (process agent services)
n United States Trademark Law & More
For information on CT’s professional registered agent services, see:
https://ct.wolterskluwer.com/starting-a-business/registered-agent-services-for-new-businesses
Does My LLC, S Corp or C Corp Need a Registered Agent?
REGISTERED
AGENT
SERVICES
CT

15. Thank You
Questions?
Contact CT’s Expert Registered Agent Professionals
CT provides LLC, S Corp and C Corp formation &
incorporation services for businesses of all sizes nationwide
#1 Registered Agent for over 120 years
REGISTERED
AGENT
SERVICES
CT
January, 2015 © 2015, Wolters Kluwer Corporate Legal Services. All rights reserved.