US TAX SYSTEM: The most important issue when establishing a company in the USA is the type of company to be established. In addition to the company type, other important factors are the location of the company and the tax obligations of the company owners.

Due to the federal management structure in the USA, company establishment, tax and incentive mechanisms differ between states in terms of application.

I. C and S Commercial Companies: (C Corporations and S Corporations)

One of the main company types is the C type (C Corporation) company. The reason this company is called C type is that it is subject to the "C" section of US Federal tax law. The S type company (S Corporation) is subject to the "S" section of the said law.

The advantages and disadvantages mentioned below are prepared to cover these two company types. Commercial C and S companies are the most preferred company types by large and small companies in America.

Advantages:

• Limited liability protection for shareholders

• Ability to raise capital through stock sales

• Professional management structure

• Tax advantages in certain situations

• Perpetual existence

Disadvantages:

• Double taxation for C Corporations

• Complex regulatory requirements

• Higher formation and maintenance costs

• Strict record keeping requirements

II. Limited Liability Company (LLC)

LLC is a hybrid business structure that combines elements of corporations and partnerships. It provides limited liability protection while offering flexibility in management and tax treatment.

Advantages:

• Limited liability protection

• Tax flexibility (pass-through taxation)

• Operational flexibility

• Less paperwork than corporations

Disadvantages:

• Self-employment taxes

• Limited life in some states

• Less established legal precedent