what is an c corporation

A C corporation, or C corp, is a legal structure for a corporation in the United States in which the owners, or shareholders, are taxed separately from the entity. C corporations are distinct from S corporations, which generally are not taxed separately. They are subject to corporate income taxation, and the profits from the business are taxed at both the corporate and personal levels, resulting in a double taxation situation. C corporations offer limited liability to investors and firm owners, allowing them to lose only the amount they have invested in the business in the event of failure. Additionally, C corporations have the advantage of unlimited growth potential through the sale of stocks, and there is no limit to the number of shareholders a C corp can have. However, they are subject to certain tax disadvantages, such as double taxation, and are expensive to start due to various filing fees and state fees. C corporations are formed under the laws of a state or the District of Columbia, and they are required to hold annual meetings and have a board of directors voted on by shareholders.