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C Corporation

Definition - What does C Corporation mean?

A C corporation is a company that is set up so that the owners of the company and the company itself are taxed separately. The C in C corporation refers to Chapter C in the IRS code. A C corporation is an alternative to an S corporation. S corporations are arranged so that the owners of the company and the company itself are not taxed separately.

Justipedia explains C Corporation

C corporations are designed to limit the owners' financial and legal liability. C corporations are taxed at the corporate level and when income is distributed to owners. However, C corporations have the ability to reinvest company profits at a lower corporate tax rate. This is considered a strong advantage of this type of corporate structure. It is up to the company owners to decide if they would like to be taxed together with or separately from their companies. There are corporate structures for each option.

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