We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Are the Different Types of Corporate Structures?

By Whitney Leigh White
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

There are four main types of corporate structures that businesses can organize themselves as: a General Corporation, an S-Corporation, a C-Corporation, or a Limited Liability Company (LLC). The structure that a business chooses to construct itself as determines how the company is financially taxed from any profits that it earns, making it very important to carefully choose the right type. A large amount of time and research is required in order to choose the right type of structure to follow. The General Corporation is the most common corporate structure that businesses follow, but, like all others, it also has its own advantages and disadvantages.

When a business incorporates itself as a General Corporation, stockholders are the owners. There is no limitation on how many stockholders can invest in a General Corporation and the investors are not liable to any business creditors. The personal liability of any stockholder is, most times, limited to how much he or she initially invested into the corporation. Companies that take part in this type of structure are obliged to more state and federal regulations than other types of companies, and this type is also more expensive to form. Some of the most advantageous aspects of creating General Corporations are the tax-free benefits and the easiness of raising capital.

The “classic company structure” is referred to as the C-Corporation. Although these types of corporate structures are similar to General Corporations, there are significant differences. A C-Corporation must have a director that offers to sell shares to any existing investors before offering them up for sale to new ones. In the United States, not every state recognizes this type of structure, but those that do limit the number of shareholders from 30 to 50.

An S-Corporation, also referred to as a Small Corporation, is mostly found in businesses of small sizes. No more than 75 shareholders can take part in this type of corporation and they must decide on a single type of stock to be sold. All investors have to include the profits or losses that they incur through this type of corporation on their personal income, but this allows them to not be double taxed. The shareholders must also hold annual meetings in which each shareholder is present. Many small businesses prefer to organize themselves as an S-Corporation because limited liability protection is present and taxable gains are reduced if the company owner decides to sell the company.

In Latin America and Europe, of all corporate structures, the LLC is the most dominant. This type of organization allows the owners to protect their personal assets from any business debt. Many businesses prefer to organize themselves according to LLC corporate structures because they are allowed great flexibility when it comes to the management of the company. There are many foreign investors who prefer this type of structure because there are no ownership restrictions.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By ZsaZsa56 — On Nov 15, 2012

How large does a business need to be to be considered a corporation?

By chivebasil — On Nov 14, 2012

How are corporate structures developed? Is it an organic process or something that is implemented intentionally?

Continuing with that idea, how would a company go about changing its corporate structure? I have mostly worked for small businesses and don't have many points of reference for corporate life.

By Ivan83 — On Nov 13, 2012

Does anyone know about the corporate structure at Apple? They are one of the most profitable and consistently innovative companies on the planet and they obviously have a management style that is unorthodox. Has anyone worked for Apple before and seen how the corporate structure affects the people who work there?

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.