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C Corp or LLC What option is better for my startup?

In deciding which of the options work best for your startup. It is important to understand the differences and possibly the similarities between both options. It is important that an informed decision is made and this can only be made being knowledgeable on both structures. The decision whether to go with a Delaware C corp or LLC can potentially save you loads of time, efforts and wards of cash.

Delaware C Corp

Delaware C corp

A Delaware C corp is not just a corporate entity, it is a tax entity classification. This type of corporation is named after the subchapter of the Internal Revenue Code—subchapter “C”—under which its tax designation is described.

Delaware Limited Liability Company

A LLC is a business vehicle with a legal existence separate and distinct from its owners. The owners and managers of a Delaware LLC are not personally liable for the company’s debts and obligations. A Delaware LLC has the ability to be treated as a pass-through entity for tax purposes

Differences and similarities between Delaware C-Corporation and Delaware Limited Liability

1. Limitation of liabilityMembers of the organization are not responsibleShareholders are not responsible
2. Share CapitalThe company does not have a share capitalThe corporation can issue stock
3. Fund RaisingCompany cannot issue stock to investors for equityCorporation can sell it’s shares to raise money
4.ShareholdersNo shareholders, only membersUnlimited amount of shareholders
5. Transfer of ownershipEntity is dissolved when a member leaves Owners can easily transfer shares
7. PaperworkMinimal PaperworkIncreased documentation procedure
8. ProfitsProfits cannot be reinvested in the businessProfits can be reinvested
9. TaxationPassthrough entity, single layer of taxationDouble taxation – entity and shareholder level
10. Investor PreferenceInstitutional investors will not investYes, Investor friendly
11. Requisite filing Articles of organization filled with the Secretary of secretary of stateArticles of Association filled with the Secretary of secretary of state
12. Annual ReportFiling is not requiredFiling is required

C Corp Requirements

  • It should have at least one shareholder.
  • It should have at least one director. … 
  • It must have a registered agent.
  • The corporation should have an officer secretary responsible for signing legal papers and recording meeting minutes


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