Define: C Corporation

A C Corporation is a type of legal business entity that is separate from its owners. It is formed by filing articles of incorporation with the state and offers limited liability protection to its shareholders.

Unlike S Corporations, C Corporations can have an unlimited number of shareholders and can be owned by other corporations or non-U.S. residents. Additionally, C Corporations are subject to double taxation, where both the corporation and its shareholders are taxed on the company’s profits.

To form a C Corporation, you need to file articles of incorporation with the appropriate state agency, pay the required filing fees, and comply with any other state-specific requirements. It is also advisable to draft corporate bylaws and issue stock certificates to the initial shareholders.

Some advantages of forming a C Corporation include limited liability protection for shareholders, the ability to raise capital through the sale of stock, and the potential for tax deductions on certain business expenses.

Disadvantages of forming a C Corporation include the potential for double taxation, increased administrative and compliance requirements, and the need to hold regular shareholder and director meetings.

Yes, a C Corporation can have a single shareholder, and this individual can also serve as the sole director and officer of the company.

Yes, a C Corporation can be converted into another type of business entity, such as an S Corporation or a Limited Liability Company (LLC), by following the specific conversion procedures outlined by the state.

Yes, a C Corporation can be dissolved or terminated voluntarily by the shareholders or involuntarily through a court order. The process typically involves filing dissolution documents with the state and settling any outstanding debts or obligations.

Yes, a C Corporation can be sued as a separate legal entity. However, the liability of individual shareholders is generally limited to their investment in the corporation, protecting their personal assets.

Yes, a C Corporation can change its fiscal year-end, but it must follow the guidelines set by the Internal Revenue Service (IRS) and obtain their approval for the change.