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  • Ibraheem Shaikh replied to the topic S-Corp vs C-Corp in the forum Business 101 7 years, 5 months ago

    People generally don’t think of corporations as “subchapter s” or “c-corps” primarily because most large corporations people see are C-Corporations. A C-Corporation has significantly higher potential to grow than a c-corp because of its ability to have >100 shareholders and acquire foreign investment. S-corps, meanwhile, are the format favored by millions of American small businesses, which people generally think of just a “store” and not as a “company.”

    Any large public company you can think of, from Apple to Pepsi to Walmart, is a C-Corp. Giving an example of an s-corp is generally pointless because most people will not know of it (it is sensible that a company of less than 100 investors will never be as big or as well-known than companies with no roof on number of investors).

    Small businesses often choose to be s-corps because they aren’t too concerned with limits like inability to attract foreign investment, limits on investment, and inability to be part of a larger company. In exchange for losing these abilities, they undergo only a single round of taxation, unlike the c-corps that have to deal with double taxation.

    On the other hand, a private company with large market potential that chooses to undergo an IPO will always choose to be a c-corp, because of the massive capital and growth potential that comes from being publicly traded.