A C-Corporation is legal structure in which the shareholders and owners are taxed separately from the entity, i.e., double taxation. Double taxation occurs when the profits from the business are taxed at the corporate and the personal levels. Yes, the C-corp is also subject to corporate income taxation.
Liability is just as important as taxes and should be considered when selecting a business type. The C-corp limits the personal liability of investors, firm owners, directors, shareholders, employees or officers. Their liability is limited to their capital contribution, meaning the most the investors and firm owners can lose as a result of the business’s failure is the amount they have invested into the business. In other words, legal obligations of the business cannot become a personal debt obligation of any individual affiliated with the company.
Comments