C corporations and S corporations have many similarities and some differences too. The similarities are that both the type of companies are considered to be different entities altogether from the owners who started the business. They are registered under a different name from the primary business thereafter. Both the companies offer tax benefits to their owners and reduce their liabilities by protecting their assets in case of bad debts.
A C corporation has an extremely flexible system of functioning. It can have any number of partners and anyone like individuals, companies, foreign companies, or trusts can be a shareholder in the C corporations. Anyone who is interested in investing in the organization can buy shares. There are several kinds of stock options for C corporations and they can make use of anything and issue them. A C corporation limits the damages to the owner by limiting their liabilities in case the company runs into bad debts. The assets of the company are liquidized to pay off the debts. The assets of the owners remain untouched because the C Corporation has been created as a separate entity.
In an S corporation, the maximum number of partners cannot exceed 75. People who are a part of the S corporation or who can buy shares have to be United States citizen, charitable organizations, and trust within the country.
However, most organizations and small businesses prefer the C corporation business set up more than any other form because of its flexibility and unlimited advantages to them.