C-Corporation is the traditional and most common type of corporation. A C-Corporation allows the company to have an unlimited number of shareholders. This is beneficial to companies who envision offering stock publicly.
The inherit benefit of any form of incorporating is that it shields the shareholders (owners) from personal liability arising from business debts and business lawsuits. Our affiliate can assist you in building corporate credit for your company.


Advantages

  • Ease of Transfer – Stock can be sold or otherwise transferred fairly simply.
  • Offer Public Stock - If a company decides to go public a C- corporation is the only option.
  • Familiarity – This structure has been around the longest, and is typically has fewer IRS audits, and more tax deductions and tax planning benefits.
  • Separate Legal Existence – The company can create it’s own credit, shielding the stockholders from liability.  (Our affiliate can help you establish corporate credit quickly)
  • Centralized management – The Corporation is ran by a Board of Directors, and elected officers. The owners are the shareholders who may or may not be the Board or officers.  
  • Continuity of life – As an entity of its own, the corporation is in effect until dissolved. It is not based on one person’s life.
  • Capital generation –Corporations can sell stock to generate capital.
  • Separate Taxable Entity – A C-corporation profit or losses are taxed directly within the corporation at the corporate tax rate.

 

Disadvantages

  • Double taxation – If corporate profit is distributed to shareholders, they are taxed on the same dollars that the company was taxed on. (Many corporations avoid this by distributing those funds as wages and fringe benefits.)
  • Required to hold annual Board of directors and Shareholders meetings.
  • Security regulations – if advertising and selling to the public, security regulations apply.

 

Tax Implications

  • Separate tax return to file – Being that a corporation is a separate entity of it’s own it is required to file employment taxes and report on earnings and taxable profits. (IRS form 1120)
  • May possibly take advantage of tax free benefits, if all requirements are met (see non-profit form)

 

________________________________________________________________
The above information is compiled for your convenience from our research of other publications including State and Federal agencies.  Vision Interface can not give legal advice, nor do we claim to be CPA’s or attorneys.

S5 Box

Register

*
*
*
*
*
*

Fields marked with an asterisk (*) are required.