When you decide to incorporate your business, there are four different business entities to choose from: C-Corporation, S-Corporation, Non-Profit Corporation, or Professional Corporation . Read more or compare business entities in our Comparison Chart.

What sets a corporation apart from all other types of businesses is that a corporation is an independent legal and tax entity, separate from the people who own, control and manage it. Because of this separate status, the owners of a corporation don't use their personal tax returns to pay tax on corporate profits—the corporation itself pays these taxes. Owners pay personal income tax only on money they draw from the corporation in the form of salaries, bonuses, and the like.

An S-Corporation is a regular corporation that has elected S-Corporation tax status. Forming an S-Corporation lets you enjoy the limited liability of a corporate shareholder but pay income taxes as if you were a sole proprietor or a partner. In an S-Corporation, all business profits "pass through" to the owners, who report them on their personal tax returns. The S-Corporation itself does not pay any income tax. Therefore, an S-Corporation elects not to be taxed as a corporation. After the corporation has been formed, it may elect S-Corporation status by submitting IRS form 2553 to the Internal Revenue Service (in some cases a state filing is required as well). Read more about electing S-Corporation status.

State laws distinguish between for-profit (stock) corporations and non-profit (non-stock) corporations. A non-profit corporation often involves an organization whose primary objective is to support some issue or matter of private interest or public concern for non-commercial purposes. Examples of non-profit types might relate to the arts, charities, education, politics, religion, research, sports or some other endeavor. Under the Federal Tax Code Section 501(c), a tax-exempt corporation cannot pay dividends and, upon dissolution, must distribute its remaining assets to another nonprofit group. Read more about Non-Profit Corporations.

A benefit corporation is a corporation organized under a state's general corporation law that has elected to become subject to benefit corporation statutory provisions. Most benefit corporation statutes require that the entity "shall have the purpose of creating a general public benefit," meaning it must create a "material positive impact on society." In many states this general public benefit purpose is in addition to, and may be a limitation on, any specific purpose set forth in its articles. The benefit corporation was created to provide an option for entrepreneurs who want to voluntarily adopt higher standards of corporate purpose, transparency, and accountability. The entity provides a way to legally cement a social or environmental mission into a company's corporate and legal structure. The provisions of general corporation law apply to benefit corporations except where those provisions are in conflict with or inconsistent with the benefit corporation provisions. Therefore, like a traditional for-profit corporation, a benefit corporation is an independent legal and tax entity, separate from the people who own, control and manage it. Because of this separate status, the owners of a benefit corporation don't use their personal tax returns to pay tax on corporate profits-the corporation itself pays these taxes. Owners pay personal income tax only on money they draw from the corporation in the form of salaries, bonuses, and the like.

To keep your business legally viable, there are a number of steps you may need to follow after you incorporate your business. For example, you may need to file an Article of Amendment if you need to make changes to your company. You also may need to issue stock or file an Annual Report, which is a requirement in most states. Our business filing experts can help you process necessary changes to your business.