Corporations

What is C Corporation

• Business structure that allows owners to become legally separate from the business itself

• IRS designation for corporations that pass their income, losses, deductions and credits through to shareholders to avoid double taxation

• An entity that exists to further a social cause and provide a public benefit

What is S Corporation

• Business structure that allows owners to become legally separate from the business itself

• IRS designation for corporations that pass their income, losses, deductions and credits through to shareholders to avoid double taxation

• An entity that exists to further a social cause and provide a public benefit

C Corporations are taxed separately from their owners

• True

• False

What is a Non-Profit Corporation

• Business structure that allows owners to become legally separate from the business itself

• IRS designation for corporations that pass their income, losses, deductions and credits through to shareholders to avoid double taxation

• An entity that exists to further a social cause and provide a public benefit

What is a pro of Non-profits organizations?

• Raise capital by issuing and selling shares of stock

• May have unpredictable revenue streams

• May have a broad range of funding sources

• Prestige, credibility

What is a con of S Corp?

• Subject to greater regulations tan other business structures, incurring higher legal fees

• Complex compliance rules

• Must comply with regulations and donor stipulations

• Limited liability, transfer of interest

What is a pro of C corp?

• Limited liability for directors, shareholders and other company officers

• Is exempt from taxes

• Must register with the SEC upon reaching certain thresholds

• No or lesser corporate and self-employment tax for owner, no double tax for shareholders

Which is NOT a purpose for a non-profit corporation?

• religious

• educational

• financial

• animal walfare

In a S corporation the shareholders must be:

• individuals

• citizens

• certain trusts

• estates