More common than LLCs or S corporations, a C corporation is taxed under federal income tax laws and is generally considered more insulated in terms of limiting personal liability than the other two. Additionally, a corporation’s income is taxed, as well as the shareholder’s dividends. Why endure double taxation? Among a corporation’s bylaws, board of directors, regular shareholder meetings and corporate tax returns, an investment will likely be more protected than an investment in an LLC, as well as your personal assets from creditors. Unlimited stock and stock options increase a corporation’s ability to attract key investors. As an independent contractor, being incorporated necessarily gives the impression of greater stability and a more secured investment.

There are many reasons to establish a C corporation as opposed to an S corporation or an LLC: if you own a family business and you want to start gifting ownership to your family or if your business is profitable enough where you can save profits by keeping in the corporation.

Seek legal counsel when forming a corporation. To find out more information on C corporations’ taxation rules consult the IRS.