Many business companies wanted to be incorporated in Florida because of the many opportunities and benefits they could get. But there are confusions between S and C Corporations for the difference and similarities of the two. Which is more beneficial to their company? Which is better than the other one? These are the questions they are asking but are not aware of the answers. This article can be the start of their research of knowing about the differences of S and C Corps. Florida sunbiz website will tell you more about the corporations. You will eventually know the differences of the two when you are starting to file but it can be good if you knew ahead some of them.
- Employee Benefits. Both of the corporations have this privilege to their employees where the benefits are deductable from their salaries. The corporation differs on what benefits offered to their employees as long as the employees are tax-free. The tax-free is not that beneficial to the S Corp because the members have more than 2 percent of shares.
- Ownerships. All the shareholders of the S Corporation must have a US citizen or is currently residing in the country. The C Corp has many classes of stocks while the S Corp is limited to one class of stock.
- Federal Taxation. The C Corporation is taxed separately and must report their income and taxes to the corporation individually. This business will pay for the corporation tax. The S Corporation that has more than one shareholder has to file for the K-1 tax return form. This corporation will pay tax individually.
- Florida taxation. Most of the states do not recognize the S Corporation. It treats as the way it is treated in the Federal government. The tax is treated as federal tax and not state tax. All corporations that are not S will be treated as regular C Corporation.
These are the few differences between the two. It is for you to decide now. Llc Florida is also a business entity in Florida where you can also be incorporated.