Frequently Asked Questions
What is an INC?
An INC or Corporation (sometimes referred to as a C Corp or C-Corp*) is an incorporated entity which, like a LLC, is also separate from its owner. It shares many of the same features as a LLC in terms of limiting the liability of the owners however it is generally subject to more regulations and requirements than a LLC.
Corporations are usually required to hold a shareholder meeting every year, and they are required to give notice of those meetings. Certain actions must be confirmed in resolutions that are kept in corporate minute books.
LLCs have fewer and less formal requirements for the way they do business and they may be subject to more minimal record-keeping requirements. In many states, LLCs are not required to file annual reports.
The owners of the INC are known as the “shareholders.” Ownership is tracked by shares, with each share corresponding to a defined portion of control of the business and entitlement to the economic upside of it. The management of the day-to-day operations and major decision-making functions of the business is left in the board of directors’ hands.
INCs allow for an unlimited number of shareholders, there is no limitation on who can hold shares and no restrictions on what types of shares can be held (such as preferred vs. common). An INC is perfect for a company looking to go public.
* C-Corp is a taxation type. LLC’s may elect to be taxed as a C-Corp or a S-Corp or a Sole Proprietorship.