C Corporation

About General Corporations 

C Corporations, also referred to as Standard or General Corporations, are a separate tax paying entity for federal and state tax purposes. The C Corporation is legally considered to be a unique business structure separate from its owners. This limits the personal liability of the owners or investors to the amount of their original investment. C Corporations may offer all types of stock and have an unlimited number of shareholders.

The owners of a C Corporation are called shareholders. They elect a board of directors to oversee the major business decisions and policies. The directors appoint officers to run the day to day business operations.  President, Vice President, Secretary and Treasurer are typical officer positions. In some states, the same person can fulfill the requirements of shareholder, director and officer for a small corporation if necessary. The 'C' in C Corporation refers to a Subchapter 'C' in the tax code.

Differences from a Limited Liability Company (LLC)

C Corporations file Articles of Incorporation with the state and use Bylaws to set forth the management rules with their shareholders, directors and officers. LLCs file a Certificate of Formation (sometimes called Articles of Organization) with the state and draft an internal Operating Agreement to govern its membership. C Corporations offer shares of stock and LLCs offer membership interests.

Advantages of Forming a C Corporation

  • Owners of a C Corporation have their personal assets (bank accounts, investments, real estate, etc.) protected from the business liabilities.
  • C Corporations can deduct the cost of benefits as a business expense.
  • C Corporations can divide corporate profit between the owners and the corporation in order to reduce taxes.
  • C Corporations can raise additional capital through the sale of stock.
  • A C Corporation can issue more than one type of stock; for example, common and preferred stock can be issued.
  • No limit is placed on the number of stockholders a C Corporation may have.
  • Ownership or investment in a C Corporation is not limited to US Citizens.
  • Retirement, disability or death of a director, officer or shareholder will not terminate the existence of a C Corporation.

Characteristics of a C Corporation

  • C Corporations must hold annual shareholder meetings including written minutes to be kept with the business records.
  • C Corporations are required to issue stock.
  • ¿ C Corporations generally maintain an office, or must have a Registered Agent, within the state of formation. 
  • C Corporations are subject to double taxation, meaning its profits are taxed once to the corporation and again when the after-tax profits are distributed to the shareholders as dividends.
  • C Corporations must obtain an Employer Identification Number (EIN) for tax reporting purposes with the IRS.

Costs to Form a C Corporation

CorpAmerica has corporate formation packages for as little as $49 in Delaware and Nevada (plus applicable state fees). The cost to form a corporation in other states starts at $89.  We have multiple packages to choose from to meet your individual needs and budget. 

Start a Corporation Today

Getting started is easy with our online order form.  As the low cost leader in business formation services, CorpAmerica will save you time and money.  If you have any questions or prefer to place your order by phone, call 877-246-2462 (toll-free) or 302-636-5448 to speak with a business specialist now.

Did you know?

More than 50% of Fortune 500 companies are incorporated in Delaware. CorpAmerica can set up your small business as a Delaware corporation or LLC for as low as $49 plus any state fees.