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Advantages of Starting a C Corporation

Protect your personal assets with this popular corporate structure.

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The most common type of corporation in the U.S. is the C Corporation.

By forming a C Corporation, business owners create a separate legal structure that helps shield their personal assets from judgments against the company. C Corporations have a specific structure that includes shareholders, directors, and officers.

The C Corporation is a time-tested business formation. It has many advantages, including:

  • Limited liability for directors, officers, shareholders, and employees
  • Perpetual existence, even if the owner leaves the company
  • Enhanced credibility among suppliers and lenders
  • Unlimited growth potential through the sale of stock
  • No limit on the number of shareholders, although once the company has $10 million in assets and 500 shareholders, it is required to register with the SEC under the Securities Exchange Act of 1934
  • Certain tax advantages, including tax-deductible business expenses

The C Corporation structure does have its drawbacks. For instance, a C Corporation's profits are taxed when earned and taxed again when distributed as shareholders' dividends, what's known as "double taxation." Shareholders in a C Corporation also can't deduct any corporate losses. To avoid these concerns, many small business owners choose to form an S Corporation instead.

Watch our Video: What is a C Corporation?

Start Protecting Your Assets by Forming a C Corporation

Now that you are aware of the pros and cons of a C Corporation and if you wish to start one, The Company Corporation can help you form your new C Corporation in any state or the District of Columbia. We'll help you draft Articles of Incorporation for your business and file them with the state.

Remember, once you're incorporated, your C Corporation must adopt bylaws, hold directors' and shareholders' meetings, and issue stock to owners. The Company Corporation can help you with these and many other business requirements.

Learn More about C Corporations

To compare the C Corporation with other types of business structures, visit our Frequently Asked Questions section.

Ready to Form a C Corporation? Get Started