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Massachusetts Corporation

A “C” corporation can have unlimited numbers of shareholders, and those shareholders can be any kind of legal entity.

Corporations require annual maintenance to preserve the asset protection benefits. They require annual filings that the directors must maintain. A board of directors must be elected, annual meetings must be held, minutes of corporate meetings must be kept, stock must be issued. There is no recurring incorporation fee however in contrast to an LLC which requires an annual fee of $500.

Shareholders have to claim dividends as taxable income themselves, shareholders of a “C” corporation are “double taxed” on their dividend income.

An “S” corporation allows shareholders to claim their share of the corporation’s income directly on their personal tax return. This gets around the “double taxation” problem of a “C” corporation. The only drawback of an “S” corporation is that they are generally limited in the amount of shareholders. This makes going public with an “S” corporation practically impossible. However, if your intention is to keep your business relatively small, this is an excellent option.

In an S Corporation, shareholders must receive dividends according to the number of shares that they own. Only United States citizens and resident aliens may be shareholders of an S Corporation.

Corporations have indefinite or permant life duration.

LLC's

LLC - Limited liability companies are unincorporated entities having one or more members. LLCs are taxed as partnerships for federal and state purposes. Limited liability companies must file annual reports with the Corporations Division. The filing fee for an annual report is five hundred dollars ($500.00).
An LLC is not required to hold annual meetings or to keep formal minutes.
LLC members can distribute profits however they wish to, regardless of the percentage of ownership.
An LLC can consist of individuals or business entities, including non-US citizens. It can be started and or owned by a corporation.

Contact us with any business law questions you may have or for an initial free consultation. To start your Incorporation, click here.