Set Up a C Corporation

The state filing fees start at $100, and our service charges begin at $129. You can contact us for more questions on our pricing plans. Or chat with our customer executives to get more clarity.

The maintenance of a C corporation organization must be evidenced in administration and record of regular director and shareholder meetings. Business transactions must be kept separate from owner expenses for purposes of Corporation tax reporting.

These are basic C corp requirements:

1. Document investment capitalization for official approval.
2. Establish proper shareholder guidelines to meet your eligibility criteria.
3. Separate your personal transactions from business expenses.
4. Keep an official record of your organization for good administrative standing.

One of the major differences between a C corporation and an S Corporation is that of single-layer taxation. An S corp is not required to pay corporate tax. This also means that if you own an S corporation, your shareholder income is taxed at an individual level.

The other differences include double taxation, which is true in the case of C corporations as they have to regularly file corporate-level income taxes. In addition to this, S corps are allowed to own up to 100 shareholders, whereas C corps have no ownership limits.

C corporation follows an individual tax system. One of the major reasons why C corps are often faced with double taxation implications. And by double taxation, we mean that you have to pay your personal income tax and taxes levied upon your profits separately.

Similar to S corp and LLC, a C Corporation is a legal structure for businesses which determines how a business entity is taxed. The ‘C’ here means that the businesses are taxed according to the provisions of subchapter C of the Internal Revenue Code.

Yes, a C Corp can be made up of one member only. As the owner of a company, you can choose to be taxed as an S corp or a C corp. However, if you elect a C Corp status, you will not be subject to a pass through taxation which is the case with an S Corp.

The federal corporate tax rate applicable on C corporations as of now is 21%. The combined average can vary based on the state corporate taxes levied on your business. These generally vary from 0 to 11.5%.

A C Corp is considered as a separate legal entity and can offer following advantages:

• Highest level of limited liability protection. 
• More than 100 shareholders. 
• Can easily accumulate capital due to no limitation on shareholders at a low tax rate. 
• Easy transfer of shares. 
• Offers a wide range of deductions and expenses by the IRS.

One of the biggest advantages of having a C Corp Status is the wide array tax deductions that are allowed to them by the IRS. Here’s a list of some of them:

• Personnel tax deductions

• • • Healthcare
    • All training expenses
    • Sick pay
    • Vacations
    • Benefits for disables employees
    • Retirement plans

• Rental or Office maintenance expenses

• • • Insurance premiums 
    • Legal or professional fees. 
    • Supplies or materials for offices. 
    • Cost of licenses or business permits.

• Tax deductions on company vehicles

• • • Insurance, memberships or installations in the vehicle. 
    • Maintenance costs such as oil changes, fuel, lease payments, etc.

• Startup Tax Deductions

• • IRS allows deduction of the first $5000 of start-up costs on corporate taxes (attorney fees, advertising costs, wages for trainees, etc.)

Double taxation: A C Corp offers a disadvantage of double taxation. It generally happens when a C Corp incurs profit and splits it among the shareholders. In this case, the profits will be taxes at the corporate level and the individual level too. However, investors have to pay taxes if and when they receive the dividend from the corporation.  High corporate tax rates: Businesses can incur high tax rates in case the annual income exceeds $75,000 (not applicable for the first time). No tax deductions for corporate losses: Shareholders cannot deduct company losses on their tax returns. 

You can qualify for a C Corp Status if you fulfill the following legal requirements:

• Must have an Annual General Meeting or AGM for all your shareholders and board of directors and discuss strategies, opportunities, etc. 
• Appoint board of directors elected by the shareholders. 
• Give ownership of the business by issuing shares. 
• Assign the position of shareholders, directors, officers and employees within the corporation. 

Yes, all C Corps companies are publicly traded. This allows them to sell 100% of their stocks and have multiple shareholders. However, a C corp can have only one class of stock.

Unlike S Corporations, there are no limitations for a C Corp business entity. In the case of stock ownership, C Corps stocks can be owned by anyone. This includes non-US citizens and other business entities.