What is an S corporation, and how is it different from a C corporation?

S corporation

S corporation is a privately held corporation that has a limited liability that does not need to pay any income taxes. The income, profit, and loss of this corporation is instead shared and passed to the shareholders of the corporation. These shareholders then personally report their losses and profit on their own income tax return.

C corporations

C corporations have many differences from S corporations. C corporations can have multiple classes of stocks whereas the S corporation is authorized to single class. C Corporation cannot be possessed by the S corporation. Similarly, C corporation can have unlimited shareholders while the S corporation can have up to 100 shareholders.

Answer: a c corporation is the traditional way of being taxed. Instead, the s corporation provides a different way of being taxed which is not corporate but rather individual.