A C corporation, often simply called a C-corp, is a legal business structure recognized by the U.S. Internal Revenue Service (IRS). It's a distinct legal entity separate from its owners, offering robust liability protection. This structure is the default for corporations and is chosen by businesses seeking to raise significant capital through the sale of stock or by those anticipating a future IPO. Understanding the C corporation meaning is crucial for entrepreneurs making strategic decisions about their business's future. Key characteristics define a C-corp, including its ability to issue stock, its perpetual existence, and its unique tax treatment. Unlike pass-through entities like LLCs or S-corps, a C-corp is taxed on its profits at the corporate level, and then its shareholders are taxed again on dividends they receive. This is known as "double taxation," a significant factor to consider when evaluating this business structure. Despite this, the C-corp structure offers benefits that make it the preferred choice for many growing enterprises, particularly those with complex ownership or significant investment needs.
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