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General Corporation (C Corporation)

A General Corporation (or "C Corporation") is the most common corporate structure for medium and large companies. Characteristics include:

• Anonymity of Shareholders (total) and Directors (relative)
• Unlimited Number of Shareholders
• Separate Legal Entity
• Taxation of Profits and Losses at the Corporate Level
• Possibility to Raise Capital with Sale of Shares
• Easy Transfer of Shares
• Tax Benefits
• No Obligation for the Shareholders or Directors to be U.S. Citizens or Residents.

Close Corporation

A Close Corporation is similar to a C Corporation, except for the following aspects:

• Number of Shareholders Limited to 30
• Transfer of Shares Conditional to Directors' Prior Approval
• Prohibition to Trade Shares on the Stock Exchange

S Corporation

An S Corporation is actually a C Corporation which then obtains a special tax status from the Internal Revenue Service (IRS). The Corporation must apply to obtain this special status within a certain time frame after its incorporation. Instead of being taxed at the Corporation level, the profits and losses are transferred, for tax purposes, to the Shareholders (as though they were partners). Double taxation is avoided (i.e. at the corporate level and at the personal level) and does not alter any of the legal protection offered by a Company.

• Protection of the Shareholders' Assets
• Profits and Losses of the Corporation Allotted Directly to the Shareholders
• U.S. Citizenship or Residency Required for Shareholders
• Number of Shareholders Limited to 100
• Only One Class of Shares
• Other Restrictions Applicable

Limited Liability Company (LLC)

Introduced in the United States by the State of Wyoming in 1977 and now recognized by all U.S. States, the Limited Liability Company (LLC) is a profitable mix of a Corporation and a Partnership. As a general rule, the revenues and losses of an LLC are allotted to its Members (the equivalent of Shareholders in a Corporation), which avoids double taxation (to the LLC and its Members). This type of Company resembles the S Corporation, but without the restrictions attached to the latter. The advantages of an LLC are as follows:

• Anonymity of Members and Managers
• Absence of taxation at the corporative level, except if this tax option has been specifically requested
• Personal Liability of the Members limited to their investment within the LLC
• Protection of the Members' Assets
• No Possibility for an LLC Creditor to seize control of the LLC's assets, nor Member's voting rights
• Profits and losses of the LLC allotted directly to the Members, in the proportion determined by them
• Unlimited number of Members
• Flexibility to organize the LLC
• Elimination of the usual corporative formalities (e.g. Minutes, Bylaws, meetings, Officers and Directors, etc.) if specified in the LLC Operating Agreement
• Drafting of LLC Operating Agreement in any language (no obligation to write or translate into English)
• No Obligation for the Members or Managers to be U.S. Citizens or Residents.