6. S CORPORATION:
S Corporations(S Corps) have the best of all worlds: the limited liability of a corporation and the tax status of a partnership. An S Corp is not a taxable entity, and all profits and losses are passed through to shareholders, who pay tax at their individual rates. It avoids double taxation of a regular corporation (called a “C Corporation”).
The major restrictions of S Corps are that there can only be one type of stock class, there can only be 75 shareholders, shareholders cannot be partnerships or corporations, only individuals, estates, charities or trusts, and shareholders have to citizens or residents of the U.S, not non-resident aliens. There are some states that treat an S corp. like a C Corp, and these companies must pay state corporate tax. Check with your state officials to determine the terms of your corporate formation.