Definition:
A C-Corporation (C-Corp) is a standard legal entity type in the United States that is separate from its owners and shareholders. It offers strong liability protection, unlimited growth potential through stock issuance, and is commonly used by startups seeking venture capital or plans to go public.
Unlike LLCs, C-Corps are subject to double taxation: the corporation pays federal income tax on profits, and shareholders also pay personal taxes on dividends. However, C-Corps can deduct more business expenses and reinvest profits without passing them through to owners.
C-Corps are managed by a board of directors and corporate officers, and they are required to follow strict formalities such as holding annual meetings, maintaining bylaws, and filing annual reports.
Who is it for?
C-Corps are best suited for companies aiming to raise capital, issue multiple classes of shares, or plan for long-term scalability particularly in the tech and SaaS startup space.
