A C Corporation, or simply a C Corp, is a legal structure for a business that is organized as a separate legal entity from its owners. It is one of the most common forms of business entities in the United States. The term “C Corporation” comes from the subchapter C of the Internal Revenue Code, which outlines the tax treatment of corporations.

Here are key features and characteristics of a C Corporation:

1. **Separate Legal Entity:**
– A C Corporation is considered a separate legal entity distinct from its owners (shareholders). This separation provides limited liability to the shareholders, meaning their personal assets are generally protected from the corporation’s debts and liabilities.

2. **Limited Liability:**
– Shareholders in a C Corporation typically have limited liability, meaning their personal assets are at risk only up to the amount of their investment in the corporation. This limited liability is a key advantage of the corporate structure.

3. **Unlimited Number of Shareholders:**
– A C Corporation can have an unlimited number of shareholders, and the ownership interests are represented by shares of stock. Ownership is transferable through the buying and selling of these shares.

4. **Centralized Management:**
– C Corporations have a centralized management structure, with a board of directors elected by the shareholders. The board appoints officers, such as the CEO, who are responsible for day-to-day operations.

5. **Perpetual Existence:**
– A C Corporation has a perpetual existence, meaning its existence is not affected by changes in ownership or the death of shareholders. The corporation continues to exist unless dissolved by the owners.

6. **Taxation:**
– C Corporations are subject to double taxation. The corporation itself is taxed on its profits at the corporate tax rate, and shareholders are taxed on any dividends they receive. This can result in higher overall tax liability compared to pass-through entities like S Corporations or Limited Liability Companies (LLCs).

7. **Capital Raising:**
– C Corporations have the advantage of being able to raise capital by issuing stock to investors. The ability to issue publicly traded stock on stock exchanges provides a significant avenue for raising funds.

8. **Complexity and Compliance:**
– C Corporations are subject to more complex regulatory and compliance requirements compared to simpler business structures. This includes regular filings, shareholder meetings, and adherence to corporate formalities.

C Corporations are often chosen by businesses with plans for significant growth, access to public markets, or complex ownership structures. However, the decision to form a C Corporation should be carefully considered, taking into account both the advantages and disadvantages, especially regarding taxation and regulatory compliance.