Form a C Corp to raise large amounts of capital and have flexible ownership interest. You'll get a dedicated expert to take care of forming your corporation so you can focus on growing your business.
Starting at only $0 + state fee.
Our form will walk you through all the important decisions and information.
We prepare the paperwork and file it with the Secretary of State (SOS).
We provide the documents, resources, and next steps for your business bank account, free tax consultation, and more!
Corporations have many advantages that help their owners stay protected, competitive, and profitable.
Directors and employees are shielded from becoming personally responsible for the corporation's debts and obligations.
Banks and investors consider corporations to be ideal for quickly raising large amounts of capital.
C corporations receive many tax benefits, including a low corporate tax rate and numerous tax deductions.
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How is a C Corporation taxed?
A C Corporation is taxed as its own separate entity, meaning it pays corporate income tax on its profits. If the corporation then distributes any of those profits to shareholders as dividends, shareholders pay personal income tax on that money too, resulting in what's commonly called double taxation.
What is double taxation?
Double taxation refers to the fact that C Corp profits are taxed twice: once at the corporate level when the company reports its earnings, and again at the individual level when shareholders receive dividends. Profits the corporation keeps and reinvests, rather than distributes, are only taxed once at the corporate level.
Does a C Corporation have to file its own tax return?
Yes. A C Corporation files its own federal income tax return, separate from its shareholders' personal returns, typically using IRS Form 1120. This is different from pass-through entities like S Corps and LLCs, where business income is reported on the owners' personal returns instead.
Can a C Corporation switch to S Corp taxation later?
In many cases, yes. A C Corporation can elect S Corp tax treatment by filing Form 2553 with the IRS, provided it meets S Corp eligibility requirements, including a 100-shareholder limit and restrictions on who can be a shareholder. This election changes how the business is taxed but doesn't require re-forming the company at the state level.
Do C Corp shareholders pay tax on unrealized profits?
No. Shareholders are only taxed on dividends they actually receive, not on the corporation's profits generally. A C Corp can retain earnings for years without triggering a personal tax obligation for shareholders, as long as those earnings aren't distributed.
