Question

Describe the similarities and differences of the C corporation and the S corporation.

Answer 1

The similarities of the C corporation and S corporation are

1) Both of them have limited liability for shareholders.
2) Both C corporation and S corporation's shareholders recognize gain or loss on distributions.
3) Both have well established case law and history
4) both C corporation and S corporation have liability protection.

The differences of C corporation and S corporation are

1) C corporation have entry level fees based on corporate tax rate schedule whereas the S corporation has no entry level fees but may have to pay built in gains tax or excess passive investment income.
2) C corporation stock can be freely transferable whereas S corporation cannot.
3) C corporation stock can be publicly traded but this in not the case with S corporation.  
4) C corporation is subjected to double taxation but S corporation is not.