C Corp: Advantages, Taxes, How to Form
Jump to Section
Quick Facts — C Corp Lawyers
- Lawyers available: 94 business lawyers
- Clients helped: 72 recent C corp projects
- Avg lawyer rating: 5.0 (7 reviews)
What is an C Corp?
When you decide to incorporate your business, one option for formation is a C Corp. A C Corp is a common type of corporation in the United States because it allows a business owner unlimited shareholders and attractive tax benefits.
A C Corp is like an S Corp or an LLC in that it offers liability protection for its owners. A C Corp is considered a separate entity from the owners, so an owner’s personal assets are protected in the event of a lawsuit against the company.
The biggest difference between a C Corp and an S Corp or LLC is the tax structure. C Corps are subject to federal corporate taxes which leads to a situation of “double taxing”. This may make a C Corp sound unappealing, however, C Corps also benefit from other tax advantages that are not available to S Corps or LLCs, such as the ability to carry profits and losses forward and backwards, which can help offset income in other years.
A C Corp must follow certain requirements although they are far less regulated than an S Corp. Some of these requirements include:
- Election of a board of directors
- At least one meeting per year for the directors and shareholders
- Records of minutes kept at these meetings
- Maintain voting records
- Maintain a list of all owner’s names and ownership percentages
- Have corporate bylaws
- File annual reports, financial disclosure reports, and financial statements
A C Corp, although more complicated and expensive to maintain than an LLC or S Corp, is a great option for businesses that are medium or high risk, businesses that plan on raising funds through stock sales, or a business that wants to eventually go public.
For more information about C Corps, click here.
C Corp Advantages and Disadvantages
C Corps have both advantages and disadvantages for business owners. When you are deciding how to incorporate your business, you may want to meet with a corporate lawyer to help decide which structure suits your needs. It is important to consider all the advantages and disadvantages before making your decision.
Advantages of a C Corp
- Liability Protection: Corporations offer the strongest protection against personal liability for owners. Directors, officers, shareholders, and employees are all protected under a C Corp.
- Unlimited Growth Potential: Unlike an S Corp, there are no limitations on the number of shareholders a C Corp can have. There is also no limit on the sale of stock.
- Perpetual Existence: The owner or shareholders can leave the company without effecting the company
Disadvantages of a C Corp
- Double Tax: A C Corp, unlike an S Corp, is taxed as a corporation. This means it is subject to federal taxes as a corporation and then shareholders must pay taxes again on dividends
- Expensive Fees: There are numerous expensive fees that go along with the formation of a C Corp. This can be burdensome for a new business.
- No Deduction of Corporate Losses: Shareholders in a C Corp cannot deduct losses from their personal tax returns like shareholders of an S Corp.
For more help with choosing a business structure, read this article.
How is a C Corp Taxed?
A C Corp is taxed as a corporation and is completely separate from its owners in the eyes of the IRS. A C Corp first pays taxes at the corporate level and then each shareholder will be required to pay taxes on the dividends they received from the corporation at a personal level.
This form of double taxation is often looked at in an unfavorable light, however owners of a C Corp can take advantage of many tax benefits to offset this double tax and lower their tax burden.
Some advantages to a C Corp Tax Structure include:
- Potential to Minimize Overall Tax Burden: Business owners can opt to only take a salary rather than taking a dividend because salaries are not taxed at a corporate rate
- Ability to Carry Profits and Losses Forward and Backward: C Corps have flexibility in determining their fiscal year. This allows shareholders to shift income between different years and decide when to pay taxes on bonuses or when to take a loss.
- Option to Accumulate Funds at a Lower Tax Cost: C Corps allow shareholders to retain income within the company because profits from a C Corp do not appear on a shareholder’s personal tax return.
- Salary and Bonus Write Offs: Unlike an S Corp, the shareholders of C Corps can act as employees in the corporation and take a salary. This allows the corporation to deduct these salaries as payroll taxes. Essentially, the C Corp can pay their employees to offset any taxable profits. This allows shareholders to avoid the double tax.
- Fringe Benefits: Fringe benefits allow a C Corp to take advantage of many large tax write-offs. The only stipulation is that the company must offer the same benefit to all employees. Some benefits eligible for write-offs include medical reimbursement plans, long term care, and disability insurance.
- Charitable Contributions: C Corps can deduct any charitable contributions from their taxes as long as the contribution is no more than 10% of their taxable income.
- Carry Losses Over Multiple Years: C Corps can take more operating losses than an LLC or S Corp with less scrutiny from the IRS. This is beneficial for new, growing companies.
- Less Ownership Restrictions: While an S Corp is subject to many strict regulations set forth by the IRS, C Corp owners benefit from more flexibility and less restrictions. A C Corp can have unlimited owners, including foreign owners, and can have more than one class of stock.
- Financing: Because C Corps are more flexible and less restrictive than an S Corp, they are more appealing for venture capitalists to invest in.
Image via Pexels by jiawei cui
C Corp vs. S Corp
A C Corp and an S Corp are both types of corporations and are very similar in how they are formed and run. Both corporations require a board of directors, corporate bylaws, annual meetings, and record of minutes. Both types of corporations protect their owners from personal liability and allow the sale of stock.
The two biggest differences between a C Corp and an S Corp are the tax structure and the restrictions that each corporation is subject to.
S Corps are pass-through entities so profits and losses flow through the company and are reported on the individual tax returns of the owners. In a C Corp, the business and the owners are treated as separate entities. A C Corp is subject to both corporate taxes and then owners are again taxed on dividends they received.
C Corps benefit from less restrictions than an S Corp including more flexibility with ownership regulations and stock options. Less restrictions allow a C Corp more growth potential than an S Corp. For example, an S Corp is limited to 100 shareholders that must be US citizens or permanent residents while a C Corp has no limit on shareholders, and they can be from anywhere.
Read this article to learn more about the characteristics of a C Corp.
Forming a C Corp
After you have decided to incorporate your business and you have chosen a C Corp as your business structure, you can follow these steps to form your C Corp:
- Choose and Register a Name : You must choose a name that is not currently being used and register your name with the Secretary of State.
- File Articles of Incorporation: Articles of incorporation must be filed with the Secretary of State and each state has different rules and filing procedures for this document.
- Issue Stock: Upon the creation of the business, stock certificates must be issued to the initial shareholders making them official owners of the corporation.
- Licenses and Certificates: Depending on your business and which state you are located; you may need special licenses and certificates to run your corporation. Check with your local state laws to see if this applies to your company.
- Employer Identification Number: You will need an employer identification number or EIN to open a business bank account or hire employees. You can get your EIN through the IRS website.
- Elect a Board of Directors: Every corporation, S Corps included, must elect a board of directors who oversee the management of the company.
If you would like more information about forming a C Corp, click here.
Get Help Creating a C Corp
Do you have questions about forming an C Corp and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from corporate lawyers who specialize in C Corp formation.
See Real C-Corp Formation Projects
California Prepare Articles of Incorporation to create a Prof C Corp in California, new engineering firm Prepare & File
- California
- 4 lawyer bids
- $750 - $2,000
Delaware Design and Execute Spinoff Prepare & File
- Delaware
- 3 lawyer bids
- $499 - $7,500
Utah Convert Utah LLC to Delaware C-Corp Prepare & File
- Utah
- 6 lawyer bids
- $1 - $11,000
Montana Set up a foreign-owned US C Corp (which is 100% owned by a single Canadian shareholder) Prepare & File
- Montana
- 2 lawyer bids
- $700 - $995
See all C-Corp Formation projects
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
Need to form a C Corporation?
Meet some of our C Corp Lawyers
Joshua B.
Josh Bernstein has been serving real estate and corporate transactional clients since 2002. His experience is varied, and he enjoys working on and puzzling out novel and complex corporate and real estate matters. Josh’s experience includes, among other things, the following: representation of public companies in connection with SEC reporting and compliance work (proxies, 10-K’s; 10-Q’s; 8-K’s, etc.); representation of public and private company securities issuances (including private placements, and other similar offerings); assistance in structuring and drafting joint ventures, both for investors and operating partners, and including both real estate and corporate ventures; handling public and private company mergers and acquisitions; and asset sales and dispositions; assisting clients, big and small, with real estate acquisitions, sales and financings; managing large-scale and multi-state real estate portfolio acquisitions, dispositions and financings; complex condominium creation, structuring and governance work, including: commercial condominiums, use of condominiums as a land planning tool, wholesale condominium property acquisitions and dispositions, and rehabilitating failed or faulty condominium legal structures to make ready for sale; development of restrictive covenants and owners’ association documents for master-planned communities; compliance with federal statutes governing real estate sale and development (including, without limitation, the Interstate Land Sales Full Disclosure Act, the Housing for Older Persons Act, and the Americans with Disabilities Act); representation of real estate lenders, for both improved and unimproved property, and including numerous construction financings secured by real estate; assistance with commercial leasing; from both the landlord and tenant side, and including condominium leasing; training residential home and condominium sales staff for compliance with applicable local and federal law; and workouts of all kinds. When he’s not busy lawyering, Josh may be found watching 80’s commercials, flying a single-engine plane, playing poker, or trying to be a good dad.
"Josh has been extremely helpful sorting through issues with a tenant."
Daehoon P.
Daehoon P.
Corporate, M&A & Securities Lawyer | Managing Attorney, DP Counsel PLLC Practice Areas: Business Formation | Commercial Contracts | Contract Drafting & Review | Mergers & Acquisitions | Venture Capital | Securities Offerings | Franchise Law | Employment & Equity Compensation | Intellectual Property | Cross-Border Transactions About/Bio: I represent companies, investors, and fund sponsors in corporate transactions, commercial contracting, and private securities matters, from entity formation and early-stage financings to acquisitions, exits, and ongoing strategic counsel. As Managing Attorney of DP Counsel PLLC, I help clients structure transactions clearly, allocate risk thoughtfully, and move deals forward with documentation that is practical, enforceable, and aligned with business objectives. My practice includes both day-to-day commercial matters and more complex transactional work, including venture financings, private offerings, M&A deals, fund-related documents, and cross-border structuring. What I Do: Corporate & Commercial • Entity formation and structuring for corporations, LLCs, and limited partnerships • Operating agreements, shareholder agreements, and governance documents • Commercial contract drafting, review, and negotiation • Vendor, distribution, manufacturing, SaaS, and licensing agreements • Employment, consulting, confidentiality, and equity compensation agreements • Outside general counsel support for growing companies Securities & Private Capital • Private offerings under Regulation D and Regulation S • Private placement memoranda, subscription agreements, and investor documents • SAFE, convertible note, and priced equity financings • Venture capital and private fund formation matters • Fund governing documents and offering document packages • Securities law analysis for private capital raising transactions Mergers & Acquisitions • Letters of intent and term sheets • Stock purchase, asset purchase, and merger agreements • Due diligence coordination and transaction support • Disclosure schedules, closing documents, and post-closing matters • Earnouts, rollover equity, indemnity structures, and related deal terms • HSR, CFIUS, and related regulatory issue spotting for qualifying transactions Digital Assets & Emerging Technologies • Federal-law digital asset and token securities analysis • Entity structuring for blockchain and Web3 ventures • Digital asset fund and operating structures • AML/KYC documentation support and regulatory issue spotting Franchising • Franchise Disclosure Documents (FDDs) • Franchise agreements • Master franchise and area development agreements • Franchise structuring and registration coordination Real Estate Transactions • Commercial real estate acquisitions and dispositions • Real estate joint ventures and syndications • Commercial lease drafting and negotiation • Real estate investment structures and related offering documents Cross-Border & International • U.S. market entry and entity structuring for international clients • Delaware and multi-entity holding structures • Cross-border transaction planning and documentation • Coordination with foreign counsel and tax advisors on cross-border matters Why Clients Hire Me: • Big-law-level drafting with boutique responsiveness • Practical, business-focused advice grounded in execution reality • Clear scoping and transparent fee arrangements • Experience across financings, acquisitions, fund formations, and cross-border transactions Typical Projects: • Contract drafting and negotiation • Entity formation and governance packages • Private offering document suites • Venture financing documentation • M&A transactions from LOI through closing • Fractional or outside general counsel support Industries Technology | SaaS | FinTech | Digital Assets | E-commerce | Healthcare | Real Estate | Food & Beverage | Professional Services
"Daehoon reviewed my Terms of Service and Privacy Policy for a consumer mobile app with NFC-enabled physical merchandise and e-commerce. I came in with polished drafts already vetted against the codebase — so this was a review engagement, not drafting from scratch. The quality of his analysis stood out immediately. His proposal was the only one that flagged specific technical nuances about my product before I even hired him — like the distinction between service-provider and third-party framing under CCPA, and that city-level location data still triggers most state privacy frameworks. That level of attention carried through to the deliverables. He returned redlined versions of both documents plus a detailed decision-items list covering everything from DMCA counter-notification gaps to pseudonymous data classification under state privacy laws. His terminology change from "anonymized" to "pseudonymous" for analytics data was the kind of precise, substantive catch that actually changes how you architect your deletion pipeline — not just cosmetic legal polish. Communication was straightforward and professional. Would hire again for future legal doc work."
Rene H.
I am an attorney licensed in both California and Mexico. I offer a unique blend of 14 years of legal expertise that bridges the gap between diverse legal landscapes. My background is enriched by significant roles as in-house counsel for global powerhouses such as Anheuser-Busch, Campari Group, and Grupo Lala, alongside contributions to Tier 1 law firms. I specialize in navigating the complexities of two pivotal areas: AI/Tech Innovation: With a profound grasp of both cutting-edge transformer models and foundational machine learning technologies, I am your go-to advisor for integrating these advancements into your business. Whether it's B2B or B2C applications, I ensure that your company harnesses the power of AI in a manner that's not only enterprise-friendly but also fully compliant with regulatory standards. Cross-Border Excellence: My expertise extends beyond borders, with over a decade of experience facilitating cross-border operations for companies in more than 20 countries. I am particularly adept at enhancing US-Mexico operations, ensuring seamless and efficient business transactions across these territories.
"Rene gets the job done in an effective and efficient manner. Rene understood the goals of the project I hired him for; delivered and reached those goals with his knowledge and experience; as well as consistently following up on time, and is pleasant to work with."
Ayelet F.
Ayelet G. Faerman knows what influencers mean to brands today. With experience as legal counsel for a beauty brand for over 5 years, and overseeing multiple collaborations, Ayelet has experienced the rise of influencer marketing. As the founder and managing partner of Faerman Law, PA her practice focuses on influencer relations including a specialization in contract negotiations.
"Professional, pleasant to work with and excellent communication. Would highly recommend Ayelet!"
Benjamin E.
Benjamin is an attorney specializing in Business, Intellectual Property, Employment and Real Estate.
"Fast responses to all the questions and the price is reasonable. All the work was completed within the set time frame. I would recommend him to friends and family."
Richard G.
Attorney Gaudet has worked in the healthcare and property management business sectors for many years. As an attorney, contract drafting, review, and negotiation has always been an area of great focus and interest. Attorney Gaudet currently works in Massachusetts business, employment, corporate and bankruptcy law.
November 4, 2022
Jonathan R.
Jonathan Rudolph is an experienced litigator who has been admitted to the state and federal bars of New Jersey since 1991. He is a graduate of Cornell University and Rutgers University School of Law—Newark and the Justice Morris Pashman American Inn of Court. During the nearly four years he served as a Deputy Attorney General in the Division of Law for the State of New Jersey, Mr. Rudolph successfully prosecuted cases under the New Jersey Consumer Fraud Act. Mr. Rudolph practices civil law, primarily litigating matters that include the following: civil; commercial; complex commercial; business disputes; and probate litigation, including will contests. He also offers services for preparing wills, trusts, powers of attorney, advance care directives. In the technology sector, Mr. Rudolph can manage and conduct ediscovery review and management. He also has an extensive background in the implementation and use of technology to ensure statutory regulatory, and internal compliance in multiple industries, particularly as such conduct relates to privacy laws in the U.S. and E.U. and for financial services. He has been recognized as a subject matter expert in regulatory compliance, surveillance, and supervision and is one of the three inventors on U.S. Patent US11336604B2, which governs techniques for supervising communications from multiple communication modalities.
Find the best lawyer for your project
Browse Lawyers NowLawyer Reviews for C Corp Projects
Prepare Articles of Incorporation to create a Prof C Corp in California, new engineering firm
"Paul was great to work with, very knowledgeable, practical and straightforward. Thanks."
SaaS Startup Formation & IP/Privacy Counsel
"Scott provided a great consultation and legal counsel."
U.S. Startup Lawyer Needed – SAFE Review, Delaware C-Corp Formation Guidance, & Accelerator Due Diligence (Fixed Fee)
"Daniel was a pleasure to work with throughout. His experience and expertise were evident in the quality of his guidance and the timeliness of his deliverables. He was consistently professional, responsive and thoughtful in his approach and I found his support genuinely helpful at every stage of the work."
Switching the domicile of the companies from CA to FL
"She is very easy to work with. Always on top of the action items and get back to the client's needs immediately. Will continue to work with her."
Tech Startup. Incorporate in Delaware, will be doing an Angel round within 30 days.
"Very competent attorney who gets to the point quickly and cheerfully."
Acquisitions
C Corp
New York
C corp and exit strategies?
I am the founder of a small C Corp that has been in business for 5 years. We have achieved success and grown significantly since our founding, but I am now considering different exit strategies. I am seeking legal advice about which exit strategies would be best for my C Corp and how to properly implement them.
Michael S.
There are a number of possible exit strategies, including a sale to a third party, a sale to an employee stock ownership plan, and a sale to an employee-owned cooperative corporation. Each of those approaches could be effected through a single transaction, or through multiple installments, or you could maintain some ownership of the business indefinitely. Each appraoch comes with certain relative advantages and disadvantages. Please contact me if you would like to discuss your options in greater detail.
Incorporation
C Corp
California
C corp tax advantages?
I am a small business owner looking to incorporate my business as a C Corp. I'm interested in learning more about the tax advantages that come with this type of corporate structure. I want to make sure that I am making the best decision for my business and am looking for a lawyer to help me understand the tax implications of this decision.
Paul S.
I handle a lot of business formations, and typically only form corporations for tech startups and professionals, such as doctors and dentists. There are significant differences to how corporations are taxes vs. LLCs, and whether those are advantageous depends on the kind of business you are starting, and what your goals are.
Business
C Corp
Ohio
What are the steps and requirements for forming a C Corporation?
I am currently in the process of starting my own business and I have decided to structure it as a C Corporation. I have done some initial research on C Corp formation, but I am still unsure about the specific steps and requirements involved. I would like to consult with a lawyer to get a clear understanding of the process, including any necessary documents, fees, and legal obligations that come with forming a C Corporation. This information will help me ensure that I am following the correct procedures and meeting all the legal requirements in establishing my business as a C Corporation.
Paul S.
You form a corporation by filing articles of incorporation with the Secretary of State. Then you will need initial board resolutions to authorize various post-incorporation organizational matters, as well as bylaws. You will also need to issue stock to the founders. This is the kind of project I have handled for dozens of clients.
Dissolution
C Corp
New York
Can a C-Corp be dissolved without distributing the remaining assets to the shareholders?
I am a shareholder in a C-Corp that has been struggling financially for several years, and it has become evident that the company is no longer viable. We have explored options for restructuring or selling the business, but it seems that dissolution may be the most appropriate course of action at this point. However, there is disagreement among the shareholders regarding the distribution of the remaining assets, and some are proposing that the assets should not be distributed at all. I am seeking legal advice to understand if it is possible to dissolve the C-Corp without distributing the remaining assets to the shareholders and what implications this may have for the shareholders and the company.
Danny J.
The dissolution of a C-Corp is a complex process governed by state laws and the company's bylaws. While it is generally expected that remaining assets would be distributed to shareholders after satisfying creditors, there are scenarios where this might not occur: 1. Asset distribution may be restricted if there are outstanding debts or legal obligations. 2. Some states allow for alternative distribution methods if specified in the articles of dissolution. 3. In certain cases, assets might be transferred to a trust or another entity for specific purposes. However, the implications of not distributing assets can be significant: - Potential breach of fiduciary duty claims - Tax consequences for the corporation and shareholders - Compliance issues with state corporate laws Given the complexity of your situation and the disagreement among shareholders, it would be prudent to have a thorough legal analysis of your specific circumstances. As an experienced corporate attorney, I could: 1. Review your company's bylaws and financial situation 2. Analyze applicable state laws regarding dissolution 3. Advise on potential legal risks and shareholder rights 4. Guide you through the dissolution process to ensure compliance Feel free to reach out to discuss your situation in more detail and explore the best course of action for your company's dissolution.
Business
C Corp
North Carolina
C corp and change of control?
I am a business owner looking to form a C Corporation. I am in the process of creating the Articles of Incorporation and am interested in understanding the implications of a change of control on the C Corporation. I am looking to ensure that all necessary steps are taken to protect my business and its assets in the event of a change of control.
Nicholas M.
These are great questions, and are going to be very specific to your corporation and how you want to run things. Generally, you can structure things however you want, but working with an Attorney on your bylaws will ensure an objective outsider is thinking through how conflicts can be resolved before they impact day-to-day business operations.
Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.
View Trustpilot ReviewNeed to form a C Corporation?
Business lawyers by top cities
- Austin Business Lawyers
- Boston Business Lawyers
- Chicago Business Lawyers
- Dallas Business Lawyers
- Denver Business Lawyers
- Houston Business Lawyers
- Los Angeles Business Lawyers
- New York Business Lawyers
- Phoenix Business Lawyers
- San Diego Business Lawyers
- Tampa Business Lawyers
C Corp lawyers by city
- Austin C Corp Lawyers
- Boston C Corp Lawyers
- Chicago C Corp Lawyers
- Dallas C Corp Lawyers
- Denver C Corp Lawyers
- Houston C Corp Lawyers
- Los Angeles C Corp Lawyers
- New York C Corp Lawyers
- Phoenix C Corp Lawyers
- San Diego C Corp Lawyers
- Tampa C Corp Lawyers
ContractsCounsel User
Advice on whether I need an LLC, C-corp, or other entity; help forming the entity
Location: Texas
Turnaround: Over a week
Service: Prepare & File
Doc Type: C-Corp Formation
Number of Bids: 6
Bid Range: $200 - $1,000
ContractsCounsel User