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Why to incorporate a C Corporation?

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Category : > Articles Directory To Open A Corporation in The USA
Posted On : Sat Jan 12th,2019

A C corporation is one of the entity types which is used to conduct business in the state it is registered. We will discuss below the distinguish characteristics of a C Corporation

Why it is called a C Corporation rather simply a "Corporation"?

The name C Corporation is derived from the Internal Revenue Service code "Sub chapter C".


Briefly defined below the basic characteristics of a C-Corporation:

  1. A C Corporation has a lower tax bracket compare to the pass through entities such as partnerships, limited liability companies and s corporations.

  2. A non US resident is eligible to incorporate a C Corporation.

  3. Officers can draw payroll from the C Corporation.

  4. The Internal Revenue Service does not charge penalties based on number of stockholders' and employees.

  5. A C Corporation is highly recommended for the public trading and investment companies.

  6. There is no limitation of the stockholders such as an S Corporation, which currently holds 100 stockholders' only.

  7. A C corporation holds an ability to transfer the tax liability in the future years for the expansion of business, whereas a pass through entity does not provide such facility, rather the taxes have to be paid in the year it was incurred.

  8. A C Corporation does not limit to the officers contributions and credits by passing to the income tax and face limitations. If the contributions reached the yearly limitation cap, then it can roll over in the future years.

  9. The losses can move forward or backward to offset a profit of the C Corporation.

  10. A C Corporation limits the liability of the stockholders and keep detached the personal assets from business.




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