A C-Corporation, or C-Corp, is a business entity that is set up in such a way that its profits are taxed separately from its owners profits, per subchapter C of the Internal Revenue Service, or IRS. A C corp is owned by shareholders who collectively oversee business decisions. These owners, however, have limited liability. This means that they cannot be sued individually for any corporate wrong doings. In some ways, then, a C-Corp is similar to a LLC, or limited liability corporation.
What Are the Advantages to Incorporating as a C-Corp?
There are a number of advantages to filing and incorporating as a C-Corp, as compared to other options for incorporating your company. These advantages include:
•Limited liability for shareholders, officers, directors and even employees.
•Tax advantages, including the option of deducting business expenses.
•Continued existence, even if an owner leaves the company or a shareholder steps aside. Because incorporating as a C-Corp sets up a business as a legal entity, independent of owners and shareholders, this entity can continue indefinitely, regardless of these kinds of changes.
•Increased credibility with lenders and suppliers.
•No limit as to the number of shareholders. However, you should be aware that when your company reaches 500 shareholders and $10 million in assets, you are required to register with the SEC or Security and Exchange Commission.
•Nearly unlimited potential for growth, due to the potential sale of stock.
Is an Attorney Necessary When Incorporating as a C-Corp?
No, an attorney is not needed if you choose to incorporate as a C-Corp. You can certainly prepare and file any paperwork yourself. However, it may be easiest to simplify the entire process by of incorporating as a C-Corp by using the services of GovDocFiling, rather than dealing directly with the IRS. You can get started immediately by simply filling out this form.