Inc. / Corporation
An Inc. (Corporation) is a US stock corporation - a separate legal entity owned by shareholders, with limited liability and its own taxation; broadly the US counterpart of a German AG.
A corporation is formed under the law of a specific US state (Delaware is popular) and gives its shareholders limited liability. A "C-corporation" is taxed as its own taxpayer; an "S-corporation" is a tax election (open only to US-eligible shareholders) that passes income through to owners. German companies expanding to the US choose between forming a corporation or an LLC; corporations suit businesses planning outside investment or a future share issuance.
See also: AG, GmbH, LLC vs GmbH
Frequently asked questions
- Corporation or LLC for a German company entering the US?
- Both give limited liability. An LLC is simpler and flexible on taxation; a corporation is the usual choice when outside investors, venture capital, or issuing shares are in view. The right answer depends on the tax and investment plan - worth a US advisor's input.
- Is "Inc." the same as the German "AG"?
- They are counterparts, not identical. Both are stock corporations with shareholders and limited liability, but they are formed under different legal systems; an AG also has a mandatory supervisory board that a US corporation does not.