What is a “C” Corporation?
According to the US federal income tax law, a “C” Corporation (or a C Corp) refers to any corporation taxed separately from its owners or shareholders. Most major companies are classified as C Corps for income tax reasons. This means that corporations must pay taxes on all earnings before distributing the remaining amounts to shareholders. Then, the individual shareholders must pay personal income taxes on their shares. This is the major difference between a C Corp and an S Corp. While C Corps have limited liability, just like S Corps, C Corps are subject to corporate income taxation.
While it can be frustrating to essentially get taxed twice, the advantage is that shareholders can reinvest profits into the company at a lower corporate tax rate. Additionally, a C Corp can have many different shareholders and owners. And, the regulations of C Corps help take the burden off of any one person. Legal obligations of the corporation can’t result in a personal debt of any individual owner or shareholder.
Let San Diego Truck Insurance Help You File for C Corporation
At San Diego Truck Insurance, we understand how difficult the legal paperwork and regulations for running a business can be. It is important to understand the best way to file your corporation. So, let us help you better understand the qualifications and regulations for filing. Our agents can help you determine if you qualify to file as a C Corp, and assist you in the process.
Simply contact our office to speak with an agent about the details of your business and they will help you step-by-step through the process. Here at San Diego Truck Insurance, we make the legal side of things easy for you, so you can get back to business.