Comparison Chart


  1. Type of Entity
  2. Main Advantages
  3. Main Drawbacks
  1. C-Corporation

  2. Owners have limited personal liability for business debts.

    Fringe benefits can be deducted as business expense.

    Owners can split corporate profit among owners and corporation, paying lower overall tax rate.

  3. More expensive to create than partnership or sole proprietorship.

    Paperwork can seem burdensome to some owners.

    Separate taxable entity.

  1. S-Corporation

  2. Owners have limited personal liability for business debts.

    Owners report their share of corporate profit or loss on their personal tax returns.

    Owners can use corporate loss to offset income from other sources.

  3. More expensive to create than partnership or sole proprietorship.

    More paperwork than for a limited liability company which offers similar advantages.

    Income must be allocated to owners according to their ownership interests.

    Fringe benefits limited for owners who own more than 2% of shares.

  1. Non-Profit
    Corporation

  2. Corporation doesn't pay income taxes.

    Contributions to charitable corporation are tax-deductible.

    Fringe benefits can be deducted as business expense.

  3. Full tax advantages available only to groups organized for charitable, scientific, educational, literary or religious purposes.

    Property transferred to corporation stays there; if corporation ends, property must go to another nonprofit.

  1. Professional
    Corporation

  2. Owners have no personal liability for malpractice of other owners.

  3. More expensive to create than partnership or sole proprietorship.

    Paperwork can seem burdensome to some owners.

    All owners must belong to the same profession.