C Corp
What Is C Corp?
A C corporation (C Corp) is a standard corporate structure in which the business is taxed separately from its owners.
Profits earned by the corporation may be taxed at the corporate level and again when distributed to shareholders as dividends.
Why It Matters
C Corps allow businesses to raise significant capital through investors and operate as large, scalable companies.
However, they may be subject to double taxation.
How C Corp Works
A C Corp is formed by filing incorporation documents with the state.
The company operates as a separate legal entity and pays corporate income tax on profits.
Shareholders pay taxes on dividends received.
Example
Many large public companies operate as C corporations.
C Corp vs S Corp
- C Corps are taxed separately from shareholders.
- S Corps pass profits through to owners’ personal tax returns.
FAQs About C Corps
Do C Corps pay corporate taxes?
Yes. Corporate profits are taxed separately.
Can C Corps issue stock?
Yes. They can issue shares to raise capital.
Are shareholders liable for corporate debts?
Generally no. Liability is limited to their investment.
Related Terms
