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Ryan Green  Synergy Sports, Filed 2007
-Ryan Green Synergy Sports, Filed 2007

C-Corporation

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Overview

A C-Corporation is a separate legal entity from its owners, who are also known as shareholders. This provides limited liability protection to the shareholders who are generally not held responsible for business claims, debts and liabilities.

A C-Corporation is a separate tax entity from its shareholders which provides tax advantages through Corporate Tax Treatment. C-Corporations may choose to retain profits within the business; these profits are commonly taxed at a lower rate than personal income. C-Corporations may also choose to make a payment of “after tax profits” in the form of dividends to its shareholders, which can often lead to double taxation.

Why a C-Corporation is right for my business

You may choose to file a C-Corporation for the following benefits:

  • Limited Liability Protection- A C-Corporation limits your personal liability to no more than the amount of the original investment. Therefore, shareholders of a C-Corporation cannot be held personally liable for business claims, debts, or other liabilities.
  • Management- Three components makeup a C-Corporation: shareholders, directors and officers. A C-Corporation is allowed an unlimited number of shareholders.
  • Easy Transfer of Ownership- Through the sale of stocks a C-Corporation can easily transfer its ownership.
  • Raise Capital Easily- In a C-Corporation selling shares of stock makes raising capital easy.
  • Tax Savings- A C-Corporation’s business expenses are frequently tax-deductible. Shareholders are treated as employees of a C-Corporation making them able to take advantage of “Self-Employment Tax Savings.” A C-Corporation is commonly audited less than sole proprietorships.
  • Perpetual Existence- Corporations have an unlimited life whereas a C-Corporation does not and must be dissolved in order to no longer exist. The existence of the shareholders does not affect the existence of the C-Corporation.

Why a C-Corporation may not be right for my business

You may want to look into filing a different entity type for the following reasons:

  • Extensive business maintenance- A C-Corporation has the most extensive record keeping and formality requirements of any other business type. This includes: issuing shares of stocks, holding and documenting annual and initial meetings.
  • Double Taxation- When a shareholder is issued profits in the form of dividends it can lead to double taxation. This means the C-Corporation is taxed at the entity level (Corporate level) and again when dividends are issued to the shareholders (Personal income level).

How It Works

Now that you have decided a C-Corporation best fits your business needs, here is how it works:

  • Select a name and we will check to see if it is available.
  • Choose the state where you wish to file your entity.
  • Determine whether or not you wish iCorp to acquire your EIN and perform the Registered Agent Service.
  • Allocate corporate officers.

These four tasks can all be accomplished by filling out our fast and easy filing application. The fees associated with each product and service will be listed in your order summary and throughout the application.

Our online application will track your status as you proceed and will also save all the information populated page by page.

After the application has been submitted you will receive a confirmation e-mail with your order status and summary.

If we have questions or concerns, we simply give you a follow up call to clarify.

Again, help is only a phone call away. Give one of our knowledgeable representatives a call to assist you with your order: 1-866-689-3989

What Is a C-Corporation?

The Standard Corporation, or C-Corporation, is the most common form of corporation. The C-Corporation is viewed as a completely separate tax and legal entity from its owners. The owners of the C-Corporation are taxed as employees. C-Corporations allow for profits to be retained in the business or distributed to the shareholders (owners) in the form of dividends (which can lead to double taxation). Also, these profits are taxed at a lower rate than personal income.

What Are the Disadvantages of a C-Corporation?

  • Double taxation on shareholders (owners) personal taxes
    A C-Corporation’s net profits are issued to the shareholders (owners) in the form of dividends. The net profits of a corporation, which are issued in the form of dividends, are received by the shareholders (owners) and are then taxed personally on the dividends which are received. When dividends are paid to the shareholders (owners), the double taxation occurs on their personal taxes.
  • Extensive business maintenance
    In order to stay compliant with the law and maintain corporate status, ongoing paperwork must be compiled and completed. Also, holding annual corporate meetings and registering meeting minutes must be performed.

What Are the Advantages of a C-Corporation?

  • Limited personal liability
    Having a C-Corporation limits your personal liability to no more than that of the original investment. The shareholders (owners) of a corporation cannot be held personally liable for business claims, debts, or other liabilities.
  • C-Corporations typically provide a number of advantages:
    • Unlimited owners.
    • Unlimited entity life.
    • Easy transfer of ownership (through the sale of stock).
    • More easily raised capital (by selling shares of stock).
    • Increased credibility.
    • Lower audit risk (corporations are audited less frequently).
    • Tax deductible expenses.
    • Self-employment tax savings.
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