This question is about becoming a chief executive officer.
To tell if a company is an S corp or a C corp, you can look at the business tax returns. A C corporation is the standard (or default) corporation under IRS rules. The S corporation is a corporation that has elected a special tax status with the IRS and therefore has some tax advantages.
Both business structures get their names from the parts of the Internal Revenue Code that they are taxed under. C corporations are taxed under Subchapter C while S corporations are taxed under Subchapter S. To elect S corporation status when forming a corporation, Form 2553 must be filed with the IRS and all guidelines must be met.
C corporations and S corporations share many of the same properties. The basic differences are:
C corps are separately taxable entities. They file a corporate tax return and pay taxes at the corporate level. They also face the possibility of double taxation if corporate income is distributed to business owners as dividends, which are considered personal taxable income.
Corporate income tax is paid first at the corporate level and again at the individual level on dividends.
S corps are pass-through taxation entities. They file an informational federal return, but no income tax is paid at the corporate level. The profits/losses of the business are instead "passed-through" to the business and reported on the owners' personal tax returns.
Any tax due is paid at the individual level by the owners.
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