WHAT TYPES OF CORPORATION CAN BE FORMED?

There are three types of corporations: A "C" corporation is responsible for the debts of the corporation, but not the individual shareholders. The net profits are taxed and the dividends are paid to the shareholders who may have to report the dividends as income. "S" corporations have the same functions and benefits as "C" corporations, except that they can have no more than 35 shareholders and that the shareholders must be U.S. residents for tax purposes. Generally this refers to people who live in the U.S. for more than six months a year. Holders of an E-2 investor visa, L-1 visa L-1 visa and even B-2 tourist visa, if they pay taxes in the U.S., can qualify to be shareholders of an "S" corporation. The main advantage of the "S" corporation is that the corporation's net profits are passed on to the shareholders and are not taxable to the corporation. A Limited Liability Company (LLC) is a corporation with limited liability, similar to a "S" corporation, yet with several significant ...  more