Many entrepreneurs and startup founders think they need to decide between forming an S-Corporation (S Corp) or a C-Corporation when they start a new business. This is a misconception.

S-corporations are not their own type of corporation. They are not their own type of entity. You don't go to the secretary of state and form an S-corporation. What you do is form a corporation or Limited Liability Company and then you approach the IRS and choose to designate that corporation or LLC as an S corp for tax purposes. So an S-corporation is not it's own thing.

When you are deciding what kind of company to create, what kind of entity to form, don't worry too much about S-corporation. You are generally deciding between corporation, which we call C-corporation ( a default corporation) or a limited liability company (LLC).

Afterwards, go to the IRS and you choose to call it an S-corp only for purposes of taxation, so you kind of bolt it on. It is more of something you do with your accountant after the fact than something you do with your lawyer upfront.

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Brett A. Cenkus has 20+ years of experience in business law, finance, and entrepreneurship. Through Cenkus Law, PC, he provides advice and services for mergers & acquisitions (M&A), securities offerings, founders’ agreements, and other general business law issues.

Through Braaten Woods, LLC, Brett helps business owners in the lower middle market ($2MM - $25MM) position themselves for sale, find buyers, negotiate, and close M&A deals.

Brett also maintains merger-resources.com, a site packed with free articles, videos, checklists, deal diagrams, template contracts, and other tools to help pass M&A knowledge to others.

Brett regularly consults with entrepreneurs and invests his own capital as an angel investor.

From 2010-2013, Brett served as Chief Legal Counsel of a publicly-traded international oilfield services company. From 2001 to 2006, he and a partner founded and built Paragon Residential Mortgage. Bridge Investments acquired Paragon in 2006.

Brett holds a Juris Doctorate from Harvard Law School and a Bachelor of Arts degree in Economics from Messiah College in Grantham, Pennsylvania.

Brett lives in Austin with his wife, Cathryn, and his daughter, Elle. He enjoys reading, squash, classic movies, great food and wine, and the New England Patriots.

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