C Corporation

A C corporation, also known as a C corp, is a legal structure for a business entity in the United States. It is called a "C" corporation because it is taxed under Subchapter C of the Internal Revenue Code.

6 Key characteristics of a C corporation include:

1. Limited liability: Shareholders are not personally liable for the debts and obligations of the corporation. Their liability is generally limited to their investment in the company.
   
   
2. Separate legal entity: A C corporation is considered a separate legal entity distinct from its owners. It can enter into contracts, own assets, and incur liabilities in its own name.
   
   
3. Unlimited number of shareholders: Unlike an S corporation, a C corporation can have an unlimited number of shareholders, including individuals, other corporations, and foreign entities.
   
   
4. Double taxation: C corporations are subject to double taxation. This means that the corporation is taxed on its profits at the corporate tax rate, and then shareholders are taxed on any dividends or capital gains they receive from the corporation.
   
   
5. Ease of raising capital: C corporations have more flexibility in raising capital through the issuance of stock. They can also attract investors by offering different classes of stock with varying rights and privileges.
   
   
6. Formal structure and compliance: C corporations have more complex administrative and compliance requirements compared to other business structures. They must hold regular shareholder and director meetings, maintain corporate records, and comply with reporting and filing obligations with state authorities and the SEC if publicly traded.
   
   

C corporations are commonly used by large businesses, especially those planning to go public, attract venture capital funding, or have significant growth potential.