Type of corporation (c-corp, income, tax return, service)

[hartford_renter]

If I want to develop software and sell. What type of business do I need. Is this an S corp?

Thanks

[Authenticity]

Generally, the 'structure' of a firm is not related to a specific type of product(s) you are offering. Tax structure and long-term business size play a larger role in this sort of decision making.

A S-Corp, LLC and partnerships are referred to as "pass-through" entities becuase the net income or loss is passed through to the individual owners tax returns and taxed at individual rates. A C-Corp is considered a separate non-natural person entity seperate from its owners and taxed at the prevailing corporate tax rate.

Generally, there are two(2) circumstances in which one would not create a C Corp:
1. You intend to build a business which will remain small by design.
2. You are creating a service based business, Dr. or Law Office, Accounting, Consulting services (Would be classified as a professional services corporation which has a higher tax rate than the individual rate)

Of course this only scratches the surface. The recommend the following books for more detail.
The Essential Corporation Handbook
Inc. and Grow Rich
Own Your own corporation (Rich Dad Series)

I hope this helps.

[hartford_renter]

Very helpful thanks a lot!