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Most companies you hear about are C corporations.

S corporations are nearly identical to C corporations, except that they do not pay any corporate taxes. There are a bunch of qualifications for being an S corp (that ensures only small companies can be S corps): https://en.wikipedia.org/wiki/S_corporation#Qualification_fo...

An LLC (Limited Liability Company) is similar to an S corp in that it does not pay incomes taxes, but it is structured differently and is not a corporation. For a startup, I've heard it's more expensive to set up an LLC than an S corp.



This is mostly true, but you're confusing because there are two different levels: corporations are registered and regulated at the state level, of which LLC is one category. The IRS then categorizes registered corporations as either S-corps or C-corps for the purpose of federal taxes. There's not a one-to-one mapping between the two levels, especially since there's 50 different states, but usually LLCs implies S corp.


In addition to @akjj's reply, I also want to point out that it's not entirely true to say that S-Corps/LLCs do not pay taxes. The short version is that a C corp pays taxes a corporate level and individual employees pay taxes on their income, where in an S corp the profits of the business must be either dispersed to the shareholders/owners or reinvested in the business, any profits which are dispersed are taxed as normal income rather than capital gains like dividends would be in a C corp, so depending on the relative size, an S-corp effectively pays a higher tax rate than a C-corp, just obfuscated through its owners.




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