Types of Corporations

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Frequently Asked Questions
  • What are the types of corporations?

    C corps, which offers their owners the strongest protection from personal liability, and S corps, which allow profits and certain losses to pass through the owners' personal income to avoid corporate taxes, are perhaps the two most well-known types of corporations. There’s also B corps, which are for-profit corporations that are required by their shareholders to also produce a public benefit. Close corporations are similar to B corps, but they have a less traditional corporate structure by comparison. Finally, nonprofit corporations are tax exempt due to being organized to do charity or some other work that benefits the public.

  • What is the difference between a corporation and a partnership?

    The main differences between a corporation and a partnership are the business’ ownership status and how it’s taxed. Corporations are distinct legal entities that are considered separate from their owners and pay taxes on their profits (and dividends in some cases). Partnerships are owned by two or more parties and have their profits passed through to personal tax returns; if there is a general partner, they must also pay self-employment taxes.

  • Who invented the Razor-Razorblade Model?

    The razor-razorblade model was named after a pricing tactic pioneered by King C. Gillette. So the story goes, Gillette created a demand for disposable razor blades by selling razor handles for next to nothing. Because razors are useless without blades, this incentivized people who acquired the handles to become repeat customers.

Key Terms

Explore Types of Corporations

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  1. U.S. Small Business Administration. "Choose a Business Structure." https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

  2. U.S. Small Business Administration. "Choose a Business Structure." https://www.sba.gov/business-guide/launch-your-business/choose-business-structure

  3. University of Chicago Law School. "The Razors-and-Blades Myth(s)," Pages 1–2. https://chicagounbound.uchicago.edu/cgi/viewcontent.cgi?article=2716&context=journal_articles