When registering a company, C corporation or C corp is the most common corporation type, but it isn“t always the top choice for small business owners. C corporations provide limited liability protection to owners, who are called shareholders, meaning owners are typically not personally responsible for business debts and liabilities. C corporations may also offer greater tax advantages because of an expanded ability to deduct employee benefits, which are most often used by growing businesses.
C corporations typically provide a number of advantages:
– Limited liability protection. Owners are not typically responsible for business debts and liabilities
– Unlimited owners. C corps can have an unlimited number of shareholders
– Easy transfer of ownership. Ownership is easily transferable through the sale of stock.
– Unlimited life. When a corporation’s owner incurs a disabling illness or dies, the corporation does not cease to exist.
– Lower audit risk. Generally C corporations are audited less frequently than sole proprietorships
How do you form a C corporation?
In order to register a company as a C corporation, Articles of Incorporation (sometimes called a Certificate of Incorporation, must be filed with the state and the necessary filing fees paid. Upon incorporation, C corporations are also required to adopt bylaws, hold an initial meeting of directors and shareholders, and issue shares of stock to owners.
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