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A C Corporation is a business term that is used to distinguish this type of entity from others, as its profits are taxed separately from its owners under subchapter C of the Internal Revenue Code. This is known as “double taxation,” whereby the C Corporation is taxed on its earnings or profits and the shareholders are taxed again on the dividends they receive from those earnings. A C Corporation is owned by shareholders, who must elect a board of directors who make business decisions and oversee policies. Because a corporation is treated as an independent entity, a C Corporation does not cease to exist when its owners or shareholders change or die. Some of the major benefits of a C Corporation include:

 Its owners (known as shareholders or stockholders) enjoy limited liability and they are generally not personally liable for the debts incurred by the corporation. They cannot be sued individually for corporate wrongdoings.

 It can deduct the cost of benefits as a business expense; for example, it can write off the entire costs of health plans established for employees.

 The corporate profits can be split among the shareholders and the corporation. This can result in overall tax savings, as the tax rate for a corporation is usually less than that for an individual.

 It can have an unlimited number of shareholders, as this allows the corporation to sell shares to a large number of investors, and allows for more funds to be raised.

 It allows for foreign nationals to have a right to own or invest in a C Corporation, which allows for diverse investors to participate in the business.

 It can offer different “classes” of stock, such as common or preferred, to different shareholders, which can help attract different groups of investors.