C CORPORATION Meaning and
Definition
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A C corporation, also known as a C corp, is a legal business structure in the United States. It is formed as a separate legal entity from its owners (shareholders), offering limited liability protection to its shareholders. This means that in case of financial debts or legal issues, the personal assets of shareholders are protected, and their liability is limited to the amount they have invested in the corporation.
One of the distinctive features of a C corporation is its ability to issue multiple classes of stock, allowing for various ownership rights and privileges. It can have an unlimited number of shareholders, including both individuals and other businesses, and there is no restriction on their residency or citizenship. This flexibility makes a C corporation an attractive option for public companies seeking to raise substantial capital from a wide range of investors.
From a tax perspective, C corporations are subject to double taxation. They are taxed on the corporate level for their profits, and then shareholders are taxed again on any dividends received. However, C corporations have the advantage of deducting many business expenses before calculating their taxable income, and they can also offer more tax-advantaged benefits to employees such as health insurance, retirement plans, and stock options.
Overall, a C corporation is a popular and widely used business structure due to its limited liability protection, ability to attract investors, and flexibility in ownership and stock classes.
Common Misspellings for C CORPORATION
- x corporation
- v corporation
- f corporation
- d corporation
- c xorporation
- c vorporation
- c forporation
- c dorporation
- c cirporation
- c ckrporation
- c clrporation
- c cprporation
- c c0rporation
- c c9rporation
- c coeporation
- c codporation
- c cofporation
- c cotporation
- c co5poration
- c co4poration
Etymology of C CORPORATION
The term "C corporation" is derived from the way corporations are taxed in the United States. The Internal Revenue Code (IRC) designates different types of corporations based on their tax treatment, including C corporations and S corporations. The letter "C" in "C corporation" refers to Subchapter C of the IRC, which outlines the rules and regulations for this type of corporate entity. The term helps distinguish C corporations from other types of corporations, such as S corporations, which are taxed differently under Subchapter S of the IRC.
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