C-Corporation 2017-11-24T10:58:29+00:00

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Documents filed with the state forming your corporation

Personalized bylaws and resolutions defining who owns and manages the company

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What is a C corporation?

Any corporation that is taxed separately from its owner is called C corporation under United States Federal Income Tax Law. Even C corporation or C corp is the most common corporation type but still it is not always the top choice for small business owner. Limited Liability protection is provided by C corporations to the owners. Owners are called shareholders in C corporation.  Owners are typically not personally responsible for business debts and liabilities. There are many perks in starting a C corporation and one of them is greater tax advantage as it offers an expanded ability to deduct employee benefits, which are most often used by growing business. All for-profit corporations are automatically classified as a C corporation.

Advantages of C corporation

  • Under Limited liability protection, Owners are not typically responsible for business debts and liabilities.
  • The advantage of having unlimited owners or shareholders is also available under C corporation.
  • If any owner of C corporation incurs a disabling illness or dies, the corporation does not cease to exist.
  • Since owners who work for the business are classified as employees, C corporation offers self-employment tax savings.
  • Less frequently audited than sole proprietorships.
  • In comparison to sole proprietorship or general partnership, C corporation may be perceived as a more professional/legitimate entity.
  • By selling share of the stock additional capital can be raised.

Disadvantages of C corporation

  • “Double-taxation” is the biggest negative aspect of C corporation. Whenever C corporation earns money, it has to pay tax. Everytime corporation issues a dividend then the shareholders are taxed on the amount they receive which results in the income “twice taxed”
  • To form a C corporation one has to go through complicated formalities like drafting articles of incorporation and bylaws which asks for details like corporation’s name, address, business purpose, and the name of its registered agent and how many shares of stock will issue.
  • C corporation is expensive to maintain. If we consider all the costs associated with preparation of the corporate tax return, compliance with corporate formalities, and the double taxation of corporate profits then a C corporation can be quite expensive to its shareholders.

How to apply for C Corporation

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In no time, you will receive your Limited Liability company package by mail.

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Economy

$149

The basics to get you started

Preliminary corporation name clearance and filing of Articles of Incorporation.


Personalized bylaws

Includes provisions that help protect directors and officers from liability.


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Standard

$239

Everything from Economy +


Deluxe incorporation kit

All of your documents organized in a custom-embossed binder


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Express Gold

$199

Everything from Standard +


Rush processing

Expedited review and printing in 2 business days.


2-day delivery

Once documents are ready, we’ll ship your final package for arrival on the second business day.


$30 off your federal tax ID


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Frequently Asked Questions

The taxes are paid by C corporation by their own. Any distributions made to stockholders are taxed again at the stockholders’ tax rates even after the corporate income tax is paid on the business. Shareholders get the income as wages which is taxed on the shareholder’s personal income tax return.
YES! A C corporation can own another C corporation.
Owner Corporation- Parent
Owned Corporation- Subsidiary
Under United States federal income tax law, a C corporation means any corporation that is taxed separately from its owners. A C corporation is different from the S corporation which generally is not taxed separately.
If no election is made with the IRS after setting up an LLC then income from the LLC will pass through to the owners in the same manner as it does with a sole proprietorship or general partnership. As tax standpoint, an LLC can also elect to be treated as a C corporation or an S corporation.
YES! It is possible for LLC to have a C corporation as its member. The income of LLC’s would pass through to C corporation. Unlike LLC’s a C corporation files its own tax return separate from its owner. Remember, a c-corporation would report the profit/loss on its own tax return.
S corporation cannot have another corporation as a shareholder. After December 31,1996, S corporation may now own 80% or more of a C corporation or 100% of a qualified subchapter S subsidiary.
C corps are able to sell ownership shares to general public in order to raise capital through the distribution of stock which make them unique. The company must list in their articles of organization the number of shares with their par value, which will be initially distributed. The company will be able to distribute the shares, once the number of shares has been recognized by the state.