1. From Class
Econ Notes
Mr. Park

2. C-Corp & S-Corp Both Offer Limited Liability Protection
Separate Legal Entities
Composed of Shareholders, Directors, and Officers

3. C-Corp vs. S-Corp C-Corp
Separate Taxable Entity: Corporate Taxes are paid through the corporation
No restrictions on ownership
S-Corp
Pass-Through Taxes: Profit/Losses are “passed through” the business and taxes are reported on the owner’s tax return
Restricted to 100 shareholders

4. Corporate Taxes C-Corp:
If corporate profits are then distributed to owners as dividends, owners must pay personal income tax on the distribution, creating “double taxation” (profits are taxed first at the corporate level and again at the personal level as dividends)

5. Terms Profit = Total Revenue - Total Expenses
Profit: A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained goes to the business's owners, who may or may not decide to spend it on the business.
Profit = Total Revenue - Total Expenses
Dividend: A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

6. What other business types are there?
Sole-Proprietorship
Partnership
Limited Liability Corporation (LLC)

7. Type of Business
Advantages
Disadvantages
Sole Proprietorship
Ease of formation
I’m the BOSS
Potential Profits
Unlimited Liability
Limited Capital
Limited Life
Partnership
Shared Responsibility
Additional capital
Difference between Partners
Difficult to Sell
Corporation
Unlimited life
Ease of transfer
Limited Liability
Double Taxation
Difficulty & Expense of Formation
S-Corporation
Unlimited Life
Ease of Transfer
No Double Taxation
Difficulty and expense of formation
Limited Liability Company (LLC)
Ease of Formation
Potentially Difficult to Transfer
Life May Be Limited