Corporation – Dispatches From The Front

Many startup businesses are started as one of three business entities: a Limited Liability Company (LLC), an S corporation, or a C corporation. So how do they differ, and which is the best startup structure? In this article, I explain the differences between these three business structures and highlight the pros and cons of each.

S Corporations

What Is an S Corporation? An S corporation is a legal entity used to form and operate a business, and which offers the benefit of “pass-through” taxation.

How Is an S Corporation Formed?

Either an “Articles of Incorporation” or “Certificate of Incorporation” form is filed with the Secretary of State in the state you decide to incorporate in.

Redomestication refers to when a business changes the state that’s considered its home state (also known as its “domicile state”). It’s a process that shifts a company’s charter to a different state, altering its residence.

Before I get into what’s involved with redomestication, let’s first talk about “domestication” and a business’s domicile.

Business domestication and domicile

Generally, a limited liability company or corporation’s domicile state is the state where the business was legally formed. Domestication, establishing a home state, gets completed by filing forms called Articles of Organization (LLC) or Articles of Incorporation (corporation). The domicile is usually where the principal place of business resides.

Tag: Corporation

LLC vs. Corporation: What’s the Best Startup Structure? | AllBusiness.com

Redomestication: How to Move an LLC or Corporation | AllBusiness.com