{"id":4903,"date":"2021-09-08T16:07:16","date_gmt":"2021-09-08T21:07:16","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/incorporation-and-legal-structures\/what-is-a-c-corporation.html"},"modified":"2025-10-31T00:26:00","modified_gmt":"2025-10-31T05:26:00","slug":"what-is-a-c-corporation","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/what-is-a-c-corporation.html","title":{"rendered":"What Is a C Corporation?"},"content":{"rendered":"\n
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What Is a C Corporation?<\/h1>\n\n
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\n By Tim Kelly, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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A C corporation<\/span> is the default tax status<\/span> when forming a corporation. It is a separate entity from the owner of the business, so the owner is not personally responsible for the debts and obligations of the business.<\/p>\n\n <\/div>\n\n\n\n

C corporations<\/span> (C-corps<\/span>) are a common business entity<\/span>. Their name comes from Subchapter<\/span> C of the\u00a0Internal Revenue Service\u2019s (IRS<\/span>\u2019s)<\/a>\u00a0tax code.<\/p>\n

The main advantage of a C corporation<\/span> is that it provides limited liability<\/span> protection<\/span> to their owners. However, the main disadvantage of a corporation is double taxation<\/span>. <\/a> Double taxation<\/span> is when a company pays a corporate tax<\/span> on profits and then the owners pay a tax on dividends on their personal <\/span>income <\/span>tax<\/span> returns<\/span>.<\/p>\n

Need help with business formation? Our trusted partner LegalZoom makes it easy\u2014packages start at $0 + state filing fees.<\/a><\/b><\/em><\/p>\n

Key Takeaways<\/h3>\n