What is a C corporation?

A C corporation is a corporation that is taxed separately from the shareholders of the corporation. The company is taxed at the corporate level, and then the shareholders are taxed on payments from the corporation at the personal level. This results in a double taxation.

Most corporations are C corporations. C Corporations differ from S corporations and Limited Liability corporations in that these other two types of corporations are not taxed at the corporate level. Instead, the payees are taxed at the individual level after they receive payments from the corporation. However, the advantage of a C corporation is that profits are reinvested after being taxed at the lower corporate tax rate.