Through a survey, it is found that mainly all the corporations are started as tiny businesses. So it is clear and makes sense that every small business has to think about what kind of entity they are required to be and how they can organize their company. Through this, they get to know about the different kinds of corporations and know about their importance.

There are four types of cooperation, and the person needs to select which corporation is best for them to start their startup. Let us briefly get to know about the different types of corporations so everybody else can also know them.

  • S Corporations

In s Corporation, all the finances are passed through the shareholders. These finances mainly include the income and losses as well as the tax deductions and the credits. In plain words, we can understand that the shareholders are the only people responsible for the corporation’s income and loss. The S Corporation needs to pay all the corporate taxes. Due to this, the S corporation avoids all the double taxation which often comes with the c cooperation.

In s Corporation, all the profits are directly passed to the corporation’s shareholders, which means that the shareholders are responsible for all the taxes.

  • C Corporations 

The corporation is very much similar to the S Corporation, and both of them act as a partner. In C Corporation, there can be some shareholders, and they can also be the corporation’s employees. But it is imperative to have a board of directors in the c Corporation. In C Corporation, the boards of directors are responsible for making all the decisions for the company, and the shareholders act like the financial backup for the company.

  • Nonprofit Corporation

This type of corporation is very much similar to the traditional way of the corporation. In this type of corporation, there is a board of directors, donors, and financial backers. As the name suggests, this kind of corporation does not produce any profit for the company. Therefore, nonprofit corporations are exempted from the tax.

  • Limited Liability Companies

The limited liability company is also known as the limited liability corporation. It is a business identity that focuses on separating the people in the business and their liability. The people are responsible for the damages of the corporation. Therefore these are the four types of cooperation, and the person needs to select which corporation will be best for their startup.


A happy mom, professional article writer, SEO practitioner, blogger, guest blogger & freelancer. She's in digital marketing since 2018. She loves reading books and spend time with her family. Reach her on Email or Facebook

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