A C-Corporation refers to any corporation that, under United States income tax law, is taxed separately from its owners. It is distinguished from an S corporation, which is not taxed separately. Most major companies (and many smaller companies) are treated as C corporations for U.S. income tax purposes.

C corporation vs. S Corporation
Shareholders of a corporation may elect to treat the corporation as a flow-through entity known as an S corporation.  An S corporation is not itself subject to income tax; rather, shareholders of the S corporation are subject to tax on their pro rata shares of income based on their shareholdings.  To qualify to make the S corporation election, the corporation's shares must be held by resident or citizen individuals or certain qualifying trusts.  Unlike corporations treated as S corporations, a corporation may qualify as a C corporation without regard to any limit on the number of shareholders, foreign or domestic.

In the United States, corporations are formed under the laws of a state or the District of Columbia.  Procedures vary widely by state.  Some states allow formation of corporations through electronic filing on the state's website or other means.  All states require the payment of a fee (often under USD200) upon incorporation.  Corporations are issued a certificate of incorporation by most states on formation.  Most state corporate laws require that the basic governing instrument be either the certificate of incorporation or formal articles of incorporation.  Many corporations also adopt additional governing rules known as bylaws.  Most state laws require at least one director and at least two officers, all of whom may be the same person.  Generally, there are no residency requirements for officers or directors.

Any distribution from the earnings and profits of C corporations is treated as a dividend for U.S. tax purposes.  Earnings and profits is a tax concept similar to retained earnings.  Exceptions apply to treat certain distributions as made in exchange for stock rather than as dividends.

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