There is no difference in liability protection between an S-Corp. and a C-Corp.: both are corporations, and both offer the same liability protection.An S-corp. is a "disregarded" or "pass though entity": it is not taxed, but rather its profits or loses go to you (the owner's) income and are taxed only once, as your income, with any other income you have. A C-corp. has double taxation: any profits are taxed first at the corporate level (the corporation pays taxes), then, if and when the the owner takes money out (takes a distribution), those profits are taxed again as part of his or her income. Generally, a small business finds the S-corp. structure preferable.