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Differences between a S Corporation and a C corporation
Rules regarding ownership
One of the major differences between an S Corporation and a C Corporation regards the rules of ownership. An S Corporation can have no more than 100 shareholders and the use of different stock classes is prohibited. A C Corporation is allowed to have an unlimited number of shareholders, and you can use different stock classes if you want to, both common and preferred. Preferred stocks have priority over common stock regarding the distribution of dividends and assets. It is common for preferred stocks to have no voting rights in corporate decision matters, but some companies issue preferred stocks that have special voting rights regarding unusual events of imperative importance, such as approving an acquisition of the company or issuing new shares.
How to form
The documents needed for formation are quite similar for both types of corporations. One of the main differences between an S Corporation and a C Corporation is that in order to form an S Corporation you must file an IRS & State S Corporation election, since this is what turns an ordinary C Corporation into an S Corporation. The rest of the required documents are the same for S Corporations and C Corporations. You will need Articles of Incorporation, Stock Certificates, Stock Ledger, Bylaws and Organizational Board Resolutions.
Capital
The differences between an S Corporation and a C Corporation are small when it comes to capital contributions, since both corporations typically rely the purchasing of stocks by shareholders. There is however one important difference; in an S Company, the use of more than one class of stocks is forbidden. A C Corporation can on the other hand use both common and preferred stocks.
Management
There are no major legal differences between an S Corporation and a C Corporation when it comes to management. Both have a Board of Directors with overall management responsibility and Officers with day-to-day responsibility.
Tax Treatment
The differences between an S Corporation and a C Corporation are huge when it comes to taxation, and the wish for a different type of tax treatment is usually why an S Corporation is established instead of a C corporation and vice versa. In a C Corporation, the corporation will be taxed, not the shareholders. Shareholders are only taxed when dividends are distributed by the corporation. In an S Corporation, profits as well as losses are passed on to the shareholders, and the shareholders are therefore the ones that will be taxed, no the corporation itself. When you file IRS Form 2553, you turn a C Corporation into an S Corporation.
Personal Liability Generally speaking, the question of personal liability will not be affected by your choice between forming an S Corporation or a C Corporation. The general rule for both entities warrant no personal liability of the shareholders. There are however exceptions to the | 
