What Is a C-Corp? Definition, Pros & Cons, and Taxes
The C corporation is often overlooked by small business owners, yet it offers advantages not available with other business structures like S corporations or LLCs.
Key features include:
Separate Legal Entity: Protects personal assets and allows the corporation to operate independently.
Limited Liability: Shareholders are only liable for their investment, not corporate debts.
Perpetual Existence: Continues beyond the life of its owners.
Free Transferability of Shares: Shares can be sold without affecting management rights.
Investor Attraction: Preferred by venture capitalists for equity financing; no share ownership restrictions.
Established Corporate Law: Provides predictability and legal clarity.
Tax Planning Opportunities: Offers various strategies for managing taxes.
However, disadvantages include:
Complexity: Requires adherence to numerous regulations and formalities.
Double Taxation: Corporate earnings are taxed at both corporate and personal levels on dividends.
Understanding these aspects can help small business owners make informed decisions about their business structure. Our office can effectively address any legal questions about . If you have any questions, please fill out the following form below and a Business Lawyer from our office will get back to you.
