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Which corporate structure is best for multi members?

For multi-member corporations, the question of which structure is best comes down to the needs and priorities of the corporation.

Size

If a company elects to have an S corp status, then it will be limited to a maximum of 100 shareholders. If a company elects to have a C corp status, then it can have an unlimited number of shareholders. Also, due to tax considerations, an S corp's shareholders must either be U.S. citizens or resident aliens. This may not be pertinent if the company’s business dealings are solely U.S.-based. However, if the company has ambitions to grow globally, then this may be a serious consideration.

Stock type

Another important consideration in a multi-member corporation is whether all shareholders will have the same corporate rights. Under the S corp scheme, all shareholders must be issued with the same class of shares, giving all shareholders the same rights corresponding to the number of shares that they hold.

This is not the case with C corp stocks. Under a C corp scheme, different classification of stocks can be granted (for example, restricting voting rights at shareholders’ meetings). If the intention of the corporation is to have multi members with different rights, then a C corp is the only option.