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C Corporation

A business that is legally completely separate from its owners. Most publicly-traded companies (and all major ones) fall under this classification. For United States tax purposes, C corporations are required to pay income taxes on their profits. The advantage to a C corporate structure is the fact that, unlike S corporations, there is no limit to the number of shareholders. A disadvantage is the fact that, because a C corporation is taxed itself and its individual shareholders are taxed on dividends, it is subject to double taxation.


A typical corporation that pays taxes on its income at the corporate level and then the shareholders are taxed on dividends distributed to them.Contrast with S-corporation,which has no taxes at the corporate level.

References in periodicals archive ?
Marginal tax rate for C-corporations generally falls from 35 percent to 21 percent.
You'll have less formation paperwork and compliance requirements than with an S-corporation or C-corporation.
This results from the C-Corporation paying tax at the corporate level on its profits, which are again taxed at the individual level when shareholders receive dividend distributions.
Owner-Compensation Catch-Up: Because you own a company organized as a C-corporation, you know that the way to get cash out is through compensation and benefits.
If the business is a C-corporation, the selling owner may qualify to delay--or potentially avoid payment of--any capital gains by electing Internal Revenue Code Section 1042.
for purposes of the treaty unless it elects under the check-the-box regulations to be treated like a C-corporation.
S-Corporation: This is basically a C-corporation that has elected a special tax treatment with the IRS.
Recent Developments: The paired-share structure allowed several hotel and mixed/hotel REITs a profitable advantage over other REITs and their public C-corporation counterparts.
And several C-corporation downsides, such as excess compensation, personal holding company tax and unreasonable accumulation of earnings are generally not problems for S-corporations.
Finally, with respect to FERC's separate action eliminating the master limited partnership tax allowance, we note that KMI has been organized as a C-corporation since 2014.
The fund is structured as a C-corporation as opposed to a traditional ETF or an ETN.