C-Corporation

What Is A C-Corporation?

A C-Corporation is a powerful tool that can provide tremendous benefits. They provide limited liability to the owners, provide the greatest tax benefits and flexibility in transferring ownership.

Ownership

A Corporation is owned by its shareholders. Shareholders can be individuals or other entities such as another Corporation, trust or a Limited Liability Company. Although a Corporation usually has more than one owner, it is possible for only one individual to create and own 100 percent of the Corporation. 

Tax

Corporations must file their own tax return. In most cases, the corporate level of tax is less than the individual rate. 

Asset Protection

The owners or shareholders of a Corporation cannot be held personally liable for the actions of the business except in the case of outright fraud. If the Corporation is properly established and maintained, the individual shareholders are not personally liable for the losses of the business and creditors may only look to the Corporation and the business assets for payment.

Quick Benefits List

  • Privacy
  • Asset Protection
  • Tax Savings
  • Fringe Benefits
  • Credibility
  • Easier Transfer of Ownership
  • Centralized Management

Disadvantages

Corporations are legally required to observe corporate formalities. Corporate formalities consist of the holding and documentation of all company meetings, the formal approval of major corporate decisions and the approval of the board of directors and shareholders. Failure to meet these requirements will lead to the disallowance of tax deductions and the asset protection that the Corporation provides. With the Corporate Veil Protection Service  you can enjoy all the benefits a Corporation provides, without the hassles and headaches of doing all the paperwork yourself. 

Uses

  • To raise capital
  • Business operation

 

FAQ's

  1. Q: What is a C-Corporation?

    A: When you file for a Corporation at the state level in most cases you are forming a C-Corporation. If you are thinking about setting up an S-Corporation, you file for a regular Corporation at the state and then file a document with the IRS to turn the company into an S-Corporation.

  2. Q: When Should I Form a Business Entity?

    A: If you operate a business, even a home-based or part-time business, or if you are thinking of starting a business, then the time to incorporate is now. Incorporating or forming a Limited Liability Company helps separate your personal liability from your business liability while offering additional tax saving benefits.

  3. Q: Who Can Form a Corporation?

    A: It does not matter if you are going to be the sole shareholder, director, officer or employee.You can form a Corporation. If your Corporation is structured correctly you can take advantage of many of the same benefits as Fortune 500 Companies.

  4. Q: How Do I Know If The Name I Want For My Company is Available?

    A: You can call 1-800-648-0966, and we can run a quick check to see if the name is available. In some cases, if the name is taken, we can help make a few simple changes that will allow it to be filed.

  5. Q: When Should You Not Incorporate?

    A: The bottom line is, it is probably easier to outline who should not incorporate than who should. The people who should not incorporate are simply those who do not have a business and are not going into business. They are people who have no assets and have no plan or desire to accumulate assets. Anyone in business, going into business, anyone with valuable assets or working to acquire valuable assets should consider incorporating.  

  6. Q: When Do I Know It’s Time To Incorporate?

    A: If you are starting a business or you’ve been in business for a while then the time to form a company is now. It doesn’t have to be a C-Corporation but it should be some type of entity that will provide liability protection. Running your business as a Sole Proprietorship is risky. As a sole proprietor you are taking on the full burden of debt, liability risk and litigation. Our expert staff is here to help. Please give us a call at 1-800-648-0966 and allow us a few minutes of your time to discuss your business plans. We can assist you in outlining some options in choosing the right entity.

  7. Q: Who Can Own A Corporation?

    A: The great thing about a C-Corporation is anybody can own shares, including another company or even a trust. Shareholders should be at least 18 years of age.

  8. Q: Where Should I Incorporate?

    A: It is not required that you incorporate your business in the state in which it operates. Small businesses just starting out will most likely choose to incorporate in the state in which they transact a majority of their business. Others will choose to take advantage of a preferred state such as Nevada. 

    In deciding in which state it is best to incorporate in, consider:

    • A particular state's regulatory climate
    • Tax requirements
    • Need for individual privacy
    • The cost of filing fees
    • Statutory law that favors business

    Why would you choose Nevada over just simply forming a Corporation in your home state? Nevada is continually ranked the number one state in which to do business and has some of the most aggressive pro-business laws in the country. Nevada incorporated over 50,000 companies last year, and 60% of those have officers and directors who live outside the state of Nevada. 

    Let's take a closer look at how Nevada encourages economic growth and how you can profit from this environment:

    • A corporate commission does not regulate Nevada. 
    • There is no requirement to disclose to the state the date appointed for the next annual meeting of stockholders for election of Directors. 
    • You do not have to disclose in your annual report the location of principal places of business  outside of Nevada. 
    • You do not have to report the transference of stock to the state. 
    • The annual filing fee is relatively low. 

    If you want to take advantage of the pro-business state of Nevada but you transact most of your business in another state, you need to qualify your Nevada company to do business in that state. This usually includes paying a small fee, which to most business owners is small potatoes compared to the benefits you get from forming your Corporation in a preferred jurisdiction.

  9. Q: How to Incorporate?

    1. Choose the type of entity - Call 1-800-648-0966 for a complimentary consultation. 

    2. Choose a name - Laughlin will run an initial name search to make sure it’s available. 

    3. Choose which state - Call 1-800-648-0966 for a complimentary consultation. 

    It is important to work with a trusted company, one that has been in the business for years and understands the importance of doing it right from the start. The biggest mistake you can make is to form a Corporation with a discount broker who is more interested in collecting a fee than assisting their clients to make the right choice. 

    At Laughlin Associates, our number one goal is to make you a client for life, which means we have one chance to do it right. Laughlin has been assisting small closely-held corporate owners to reach their financial goals for over 40 years. The amount of time and money you will spend to clean up a company that was not started properly will cost you more in the long run than going to a reputable company in the beginning, like Laughlin Associates. 

    When you incorporate with Laughlin Associates, our service does not stop there. You will have access to your own highly trained business strategists Monday through Friday, 8:00 a.m.-5:00 p.m. PST, who are available to assist you every step of the way. 

    We love to talk with business owners who are serious about their businesses and excited to take their business to the next level. Feel free to give us a call at 1-800-648-0966, complete our getting started form, or use our Live Chat feature to get immediate assistance online. 

    All that we do is submitted and performed with the understanding that we are not engaged in rendering legal, accounting or other such professional service. If legal advice or other expert assistance is required, the services of a professional should be sought.

Entity Comparison Chart

The following table provides a look at the LLC vs Corporation, and LLC vs S-Corporation. Tax comparisons can be found in the lower portion of the table.


C-CORPORATION

View the Details Incorporate Now

LLC

View the Details Incorporate Now

S-CORPORATION

View the Details Incorporate Now
Type of
Organization

Stock, there may be different classes.

Membership interests. There may be different classes of membership. One class of stock. Which may be voting or non-voting.
Eligible Owners No restrictions. No restrictions. 100 shareholder limit. No non-individual and no non-resident alien shareholders.
Management Managed by director(s) and officer(s). Two Management Types
- Managed by Manager
- Managed by Members
Managed by director(s) and officer(s).
Allocations of Ownership None. Dividends must be paid based upon stock ownership. Permitted if the allocations have substantial economic effect. None. Income, gain, and loss pass-through to the shareholders based on the percentage of shares owned.
Liability Protection There is limited liability for shareholders, officers and directors. There is limited liability for members and managers (if applicable) There is limited liability for shareholders, officers and directors.
Duration Perpetual Dissolves at the time specified in the Operating Agreement or upon the loss of a member unless other members agree to continue. Perpetual
Transfer of Ownership Shares freely transferred. There may be restrictions under certain state laws. Shares can be transferred only to eligible S-corporation shareholders

All that we do is submitted and performed with the understanding that we are not engaged in rendering legal, accounting or other such professional service. If legal advice or other expert assistance is required, the services of a professional should be sought.

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