The Contract Shop® Knowledge Base

What is a corporation?

There are two types of corporations: C corps and S corprs.
TC
Written by The Contract Shop®
Updated 8 months ago

There are two types of corporations: C corps and S corps.

C corps were very popular in the 70s and 80s. However, in the 1990s, states realized how difficult it was for businesses to operate without any liability protection. So, they created LLCs. With the advent of the LLC, C corps and DBAs are not used as frequently as an LLC or S corps. 

S corps, on the other hand, can reduce your tax liability once you’re making at least $30,000 to 40,000 in profit in a year. Tax liability decreases because an S corp only pays taxes on the remaining profit after their shareholders are paid.

If you find yourself making more money than you thought you were going to, it is a good idea to talk to an accountant to make the proper decision. 

Did this answer your question?