The difference between a C-corporation and an S-corporation is merely a tax distinction. They are both the same legal entity — a corporation. An S-corp (like an LLC) allows for pass-through taxation. Each dollar that comes into the company is only taxed on the personal income level and skips the corporate tax. The shareholders of an S-corp can also claim a loss on their personal income tax. If you want to be an S-corp, we will help you complete the forms so that you can submit (or you can have your accountant submit) the S-election. Otherwise, the corporation will stay a C corporation. However, there are certain limitations to an S corporation. For example, an S-corp cannot have preferred stock and venture capital funds cannot invest in S-corps. Therefore, if you plan on receiving venture capital funds in the next 6 to 12 months, or anticipate issuing preferred stock, then you probably want to stay as a C-corp.
How many directors do I need for the Board of Directors?
For Delaware startups, only one director is required, but you can have as many as you want.