A corporation is a more complex structure, and more expensive to form and administer than a sole proprietorship or partnership. That said, a corporate structure does offer you more protections, in part because a corporation is considered to be an independent entity that is separate from its owners.
The biggest benefit of incorporating as an S, C, LLC or Social Purpose Corporation is liability protection. First, the debt of the corporation is not considered that of its owners. So you aren’t putting your personal assets at risk, except in rare instances, such as malfeasance. A corporation can also retain profits so you don’t have to pay taxes on them. You are able to raise money more easily since you can sell stock.
The downside is increased regulation. You’ll probably want to consult with an attorney to guide you through the incorporation process as there are specific filings that need to be made with the Secretary of State and with the IRS. You will need to make sure that you file the required forms annually to demonstrate that your corporation is active and conducting business.
Corporations need some additional paperwork. This includes your articles of incorporation and bylaws that outline things like when your annual meeting will be held, how officers are elected and terms, etc.
Following are the different corporate structures a new business would use: