Types of Corporations

The structure of your business influences everything from taxes to day-to-day operations. Browse Investopedia’s expert written library to learn about sole proprietorships, LLCs, S-Corp, C-Corp, and more.

Frequently Asked Questions
  • What are the types of corporations?

    C corps, which offers their owners the strongest protection from personal liability, and S corps, which allow profits and certain losses to pass through the owners' personal income to avoid corporate taxes, are perhaps the two most well-known types of corporations. There’s also B corps, which are for-profit corporations that are required by their shareholders to also produce a public benefit. Close corporations are similar to B corps, but they have a less traditional corporate structure by comparison. Finally, nonprofit corporations are tax exempt due to being organized to do charity or some other work that benefits the public.

  • What is the difference between a corporation and a partnership?

    The main differences between a corporation and a partnership are the business’ ownership status and how it’s taxed. Corporations are distinct legal entities that are considered separate from their owners and pay taxes on their profits (and dividends in some cases). Partnerships are owned by two or more parties and have their profits passed through to personal tax returns; if there is a general partner, they must also pay self-employment taxes.

  • Who invented the Razor-Razorblade Model?

    The razor-razorblade model was named after a pricing tactic pioneered by King C. Gillette. So the story goes, Gillette created a demand for disposable razor blades by selling razor handles for next to nothing. Because razors are useless without blades, this incentivized people who acquired the handles to become repeat customers.

Key Terms

Partnership
Partnership: Definition, How It Works, Taxation, and Types
Joint Venture
Joint Venture (JV): What Is It, and Why Do Companies Form One?
Ltd. (Limited)
What Does Ltd. (Limited) Mean After a Business Name?
Franchise
What Is a Franchise, and How Does It Work?
Strategic Alliances: How They Work in Business, With Examples
C-Corp: A business structure in which owners, or shareholders, are taxed separately from the entity.
What Is a C Corp? Definition, Pros & Cons, and Taxes
Incorporation
Incorporation: Definition, How It Works, and Advantages
General Partnership
General Partnerships: Definition, Features, and Example
Conglomerate: A corporation made up of several different, independent businesses.
Conglomerate: Definition, Meaning, Creation, and Examples
Limited Company (LC)
Limited Company (LC): Definition, Meaning, and Variations
Businesswoman Doing Presentation in Big Boardroom
What Is an Associate Company, and How Does It Work?
Stock exchange market display screen board on the street showing stock rises in green colour
Silent Partner: Definition, Agreements, Vs. General Partner
Skyscrapers from a low angle view in Hong Kong, China
Controlled Foreign Corporation (CFC): Definition and Taxes
Franchise business,Businessman hand choose wooden blog with franchise marketing icons Store.
Franchisee: Definition, Examples, Benefits, and Responsibilities
Two men stand in front of a wall of charts discussing business strategy.
Limited Partner: What It Is, Laws, Role, and Tax Treatment
Articles of Organization: Part of a formal legal document used to establish a limited liability company (LLC) at the state level.
Articles of Organization: Definition, What's Included, and Filing
Three coworkers talking in a meeting in an office
Closed Corporation: Definition, Benefits, Examples
Articles of Partnership Definition and Format
Publicly Traded Partnership (PTP): A business organization with two or more co-owners that is regularly traded on an established securities market.
Publicly Traded Partnership (PTP) Definition, How It Works
What is a Franchisor? Definition, Pros, Cons, and Example
Delaware Corporation: Definition, Role of Usury Laws and Benefits
Mutual Company: Definition, How It Works, Advantages
Close-up of handshake of businesswoman and businessman.
How Are Business Decisions Made in a Partnership?
LLC Operating Agreement: Definition, Purpose, Format, Importance
Senior Businessman Business Meeting Financial Presentation
Financial Holding Company: Overview, History, FAQ
Strategic Joint Venture: What it is, How it Works
Modern skyscrapers of busy Toronto downtown
Unlimited Liability Corporation (ULC): Overview, Use Cases
A businessman giving a presentation in the boardroom.
Razor Blade Business Model: Meaning, History, Problems
Limited Partnership Unit (LPU): What it Means, How it Works
Franchise P/E: Meaning, Calculation, Formula
Male Business Owner Turning on Neon Open Sign in Shop Window
Actual Owner: What It Means, How It Works
District Business Entity: Meaning, Advantages, Examples
Page Sources
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  1. U.S. Small Business Administration. "Choose a Business Structure." https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

  2. U.S. Small Business Administration. "Choose a Business Structure." https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

  3. University of Chicago Law School. "The Razors-and-Blades Myth(s)," Pages 1–2. https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=2716&context=journal_articles