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A "C" Corporation is the most common corporate structure. It is also called a general
corporation. A “C” corporation may have an unlimited number of shareholders. It is normally
chosen by those businesses that are planning to have more than 30 shareholders or planning a
large, public stock offering. These general corporations usually pay taxes at two levels. First, the
corporation is required to pay taxes based on the corporation’s profits. Additionally, the owner or
shareholder is taxed when the corporation distributes profits, known as dividends, to the
individual. This is commonly known as “double taxation.”
If the company’s business plan includes raising capital by someday admitting new owners or
going public, then a Corporation is probably the more desirable form for the business.
In a small C Corporation, the owners "zero out" corporate income by payment of salaries to the
owners/employees. This avoids payment of corporate tax. Fringe benefits provided to all
employees, including the owner are deductible.
corporation. A “C” corporation may have an unlimited number of shareholders. It is normally
chosen by those businesses that are planning to have more than 30 shareholders or planning a
large, public stock offering. These general corporations usually pay taxes at two levels. First, the
corporation is required to pay taxes based on the corporation’s profits. Additionally, the owner or
shareholder is taxed when the corporation distributes profits, known as dividends, to the
individual. This is commonly known as “double taxation.”
If the company’s business plan includes raising capital by someday admitting new owners or
going public, then a Corporation is probably the more desirable form for the business.
In a small C Corporation, the owners "zero out" corporate income by payment of salaries to the
owners/employees. This avoids payment of corporate tax. Fringe benefits provided to all
employees, including the owner are deductible.
When to use a C Corporation
When owners live outside the country.
When the owners live in a state with state income tax
When several individuals are involved in ownership
When other entities are involved with ownership
Have sales greater than $60,000.00
Want taxes on Corporation income to be paid by the corporation and when profit is passed to
shareholders, the shareholders are also taxed.
When owners live outside the country.
When the owners live in a state with state income tax
When several individuals are involved in ownership
When other entities are involved with ownership
Have sales greater than $60,000.00
Want taxes on Corporation income to be paid by the corporation and when profit is passed to
shareholders, the shareholders are also taxed.
What is a C Corporation?