Corporation

This information came from the State of New Jersey’s Web site. Check with your accountant, lawyer or small business advisor for the most current information or changes to the tax law for this type of business organization.

In a Corporation the liability of the owners is limited to the amount they pay for their shares of stock. A Corporation is a legal entity, and its continuity is unaffected by death or the transfer of shares of stock by any or all owners.

One disadvantage of most Corporations is double taxation; income tax is levied upon profits and dividends after they are paid to the stockholders

However, in S Corporations the profits are passed through to the individual stockholders, much the same way as in a partnership. The result is no federal income tax to the corporation as an entity.

There are many differences between C Corporations, S Corporations and LLCs. There is also a taxation arrangement known as a QSSS.