For a startup with plans to grow and possibly sell shares to the public, with international founders and a desire for liability protection, which structure is appropriate?

• A. S-Corporation
• B. C-Corporation
• C. Sole Proprietorship
• D. Limited Liability Company

Answer: (B)

A C-Corporation is the best fit because it is the structure most suited to growth, attracting investors, and going public. It provides limited liability and unlimited, transferable ownership, which is essential for bringing in venture capital and eventually selling shares on the open market. It also allows issuing multiple classes of stock, giving flexibility in how equity and incentives are allocated to founders, employees, and future investors—something IPOs and large-scale fundraising rely on.

International founders can own stock in a C-Corporation, and this form avoids the foreign-share restrictions that apply to other structures designed for smaller or domestic-focused ownership. In contrast, a sole proprietorship offers no liability protection and isn’t scalable for growth, and an LLC, while protective and tax-flexible, isn’t the typical vehicle for public offerings or broad equity markets. An S-Corporation has restrictions on number and type of shareholders (including foreign ownership and one class of stock), which makes it unsuitable for a venture-backed, publicly planned startup.

So, for a startup aiming to grow, seek external funding, possibly go public, and maintain liability protection with international founders, a C-Corporation is the appropriate choice.