What is a ‘Corporation’
A C Corporation is a Corporation in which the owners or shareholders are taxed separately from the entity. With corporations most common of corporations subject to income tax. The taxation of profits from the business at the corporate and personal levels, creating a double taxation situation.
Breaking down the ‘Corporation’
Corporations pay corporate income taxes to allocate the remaining amounts to shareholders as dividends. Then the shareholders-physical persons are subject to personal income tax on dividends that they receive. Although double taxation is an adverse outcome, the possibility to reinvest profits in the company at a lower rate of corporate tax is an advantage.
The organization of the Corporation with
The first step in forming a Corporation C to select and register the unregistered name. Administrator will file incorporation documents with the Secretary of State under the laws of this state. With corporations to offer shares to shareholders, which, upon purchase, become owners of the Corporation. The issuance of certificates of Fund for the creation of a business.
All corporations should file form SS-4 to obtain employer identification number (ein). Although the requirements vary in different jurisdictions, corporations are required to submit state income, payroll, unemployment, disability and taxes. In addition to the registration and tax requirements, the Corporation must establish a Board of Directors to control the management and operations of the Corporation. Appointed by the Board of Directors seeks to solve the principle-agent dilemma in which moral hazard and conflicts of interest arise when an agent acts on behalf of principle.
C corporations must spend every year at least one meeting of shareholders and Directors. Minutes should be retained to display transparency in business transactions. Corporation C must preserve the results of the voting of Directors and the names of the owner and ownership shares. In addition, the business must have the enterprise Charter on the basis of the main business location. C corporations will file annual reports about financial disclosure and financial reporting.
The advantages of the Corporation with
Corporations limit the personal liability of Directors, shareholders, employees, and officers. Thus, the legal obligations a business will not become a personal debt obligation of any person associated with the company. In a private limited liability company continues to exist as a change of owners and members of management will be replaced.
The C Corporation may have multiple owners and shareholders. However, he is obliged to register with the securities and exchange Commission (sec) upon reaching a certain threshold level. The ability to offer stock allows corporations to obtain large amounts of capital that can Finance new projects and future expansion.