Both protect the owners' personal assets, and non-US founders can form either one without an SSN. They differ in how they are owned, taxed and run. Pick a scenario to see both side by side, then take the open questions to your adviser.
Read more about each: LLC formation and C-Corp formation.
One owner, living abroad, selling services or products
No winner here on purpose: the right answer depends on your facts.
Both are separate legal entities that shield the owners' personal assets. The differences are in ownership, tax treatment, yearly filings and paperwork.
Sources, checked September 2026: SBA: Choose a business structure · IRS: Limited liability company · IRS: Form 8832 · IRS: Form 1065 · IRS: Form 1120 · IRS: Instructions for Form 5472. This is general information, not tax or legal advice.
We don't pick a winner, because the right answer depends on facts only you and your advisers have. These are the questions that usually decide it.
The tax outcome depends on you, your home country and how you take money out. Only an adviser who knows both sides can weigh it.
If you plan to raise money, what your investors and their counsel expect matters more than any general rule. Ask before you file.
With more than one owner, agree the split and the exit rules early, in an operating agreement or in bylaws and stock records.
Your own plans decide how much paperwork is worth it. A structure you can keep up with each year beats one you can't.
Want a structured start? The company type quiz walks through the same ground in a few clicks.
You can form either structure from abroad, without an SSN. The yearly IRS paperwork is where foreign ownership changes things.
Ownerowner name
For income tax it is disregarded from its owner, but for Form 5472 the IRS treats it as a corporation. It files Form 5472 attached to a pro forma Form 1120, on which only the name, address and a few items are completed. The IRS instructions set a $25,000 penalty for not filing Form 5472 when due.
Ownerowner name
A domestic corporation files Form 1120 to report its income and figure its tax. If at least one foreign shareholder owns 25% or more at any time in the year, it is a reporting corporation and also files Form 5472.
A multi-member LLC is a partnership by default and files Form 1065; ask an adviser how that works with foreign members. Either way you need an EIN, which the IRS issues for free; see our EIN support and the guide for non-residents.
Sources, checked September 2026: IRS: Instructions for Form 5472 · IRS: Form 1120 · IRS: Limited liability company. This is general information, not tax or legal advice.
Once you and your advisers have decided, we file whichever you choose. Processing times vary; the state and the IRS set them.
Plan prices and state fees are on the pricing page. More side-by-side guides are on the compare hub, and every option is on company formation.
Taxes, investors and yearly filings, answered plainly.
Neither is better in general. An LLC is taxed as a disregarded entity or a partnership by default and has fewer formalities; a C-Corp is taxed on its own profit and is owned through shares. Which fits depends on your plans, your co-owners and your home country's tax rules, so talk to a tax adviser before you choose.
There is no legal rule that says so. The SBA notes that corporations can raise funds by selling stock, and an LLC can also take in investors as members. What matters in practice is what your investors expect, so ask them and their lawyers before you file. Forming either structure doesn't guarantee funding.
Form 5472, attached to a pro forma Form 1120, by the Form 1120 due date. Only the name, address and a few items on the Form 1120 are completed. The IRS instructions set a $25,000 penalty for not filing Form 5472 when due. Many owners work with a tax adviser for this.
Yes. An LLC can file IRS Form 8832 to elect to be classified as a corporation for federal tax. The IRS sets limits on when the election can take effect. Ask a tax adviser whether an election makes sense for you.
Some companies change structure later, but the steps, filings and tax effects depend on the state and your situation. If you already expect to need a C-Corp, discuss the timing with your adviser before you form.
Yes. We form LLCs and C-Corps fully online, with no SSN and no US visit needed. Every formation plan includes a registered agent, and we can prepare your EIN application as paid support; the IRS doesn't charge for the EIN itself.
