C Corporation

This business organization structure type is the most complex and expensive (with more forms to file) versus the other business organization structure types. Simply doing business does not form a corporation; filing a registration with the appropriate state office and complying with legislative requirements forms them.

The state law governs the corporation’s internal operations where the corporation is registered. The owners of the corporation are called shareholders, who in turn elected a board of directors to oversee the management of the corporation.

States also require the appointment of a register agent so that the service process is available should the need arise.

Pros to C Corporation:

• Funding can be acquired by selling stocks and securities.
• Shields investors (shareholders) from corporation’s debts and obligations.

• Life span of a corporation is perpetual.
• Corporation has a management team responsible for the day-to-day operations, hired by the board of directors.

Cons to C Corporation:

• Business decisions are regulated by various state and federal government agencies.
• Business records are public information.
• Most expensive to form.
• Most complicated to operate.

Tax Implications

• Double taxation– Income made by the corporation is taxed when it is earned and shareholders pay a tax on any income distributed to them in the form of dividends or distributions due to the corporation’s liquidation.