Choosing between an LLC (Limited Liability Company) and a C-Corporation is one of the first major decisions for an international founder. The right choice depends on your goals for funding and taxation.
Limited Liability Company (LLC)
Best for: Bootstrapped businesses, lifestyle businesses, and solo founders.
- Taxation: Pass-through taxation (no double tax).
- Maintenance: Lower compliance burden and annual fees.
- Investors: Difficult to raise venture capital.
C-Corporation (C-Corp)
Best for: Startups seeking venture capital or equity compensation for employees.
- Taxation: Double taxation (corporate tax + dividend tax), but qualified small business stock (QSBS) exemptions may apply.
- Maintenance: Higher compliance requirements (board meetings, minutes).
- Investors: The standard for VCs and accelerators like Y Combinator.