HOW IS AN S-CORPORATION DIFFERENT FROM A C-CORPORATION?
Both S-Corporations and C-Corporations are, at their core, corporations. They are both formed at the state level. The formation process, structure, and governance are usually identical for both. The difference is in how each entity is taxed at the Federal level. The name of each comes from Subchapter ‘C’ and Subchapter ‘S’, respectively, of Chapter 1 of the U.S. Tax Code (26 USC 1). When you form a corporation with your state and obtain an Employer Identification Number (EIN) from the IRS, it is by default a ‘C-Corporation’. You may then elect ‘S’ status by properly completing and filing IRS Form 2553. Once accepted, your corporation becomes an S-Corporation.
IF I FORM AN S-CORPORATION, CAN I THEN CHANGE IT TO AN LLC?
Yes. States typically have mechanisms to convert one business entity type to another. Note, however, that converting from a Corporation to an LLC may result in negative tax consequences, depending on exactly what is done. Speak with a Certified Public Accountant or a Tax Attorney before you do this.
IF I FORM A CORPORATION IN ONE STATE, CAN I MOVE IT TO ANOTHER?
Yes. There are multiple ways to accomplish this, and every state will have its own mechanism and procedure.