What is a C Corporation (C Corp)?

A C Corporation (C Corp) is a legal business structure where the company is considered a separate taxable entity, distinct from its owners. This structure offers limited liability protection to shareholders but subjects the company’s income to corporate taxation, potentially resulting in double taxation when profits are distributed as dividends.

Key Features

• Separate legal and taxable entity

• No restrictions on the number or type of shareholders

• Can issue multiple classes of stock

• More complex compliance requirements

Example

Most publicly traded companies in the U.S. are organized as C Corporations to facilitate raising capital and issuing stock.

Advantages

• Limited liability for owners

• Easier to raise investment from venture capital and institutional investors

• Perpetual existence, independent of shareholders’ personal status