C Corporations

C Corporations are taxed at both the corporate level (with taxes reflected on the corporate tax return) and at the shareholder level (which is reflected on shareholders’ individual returns) if dividends are paid. C Corporation tax status is the automatic tax classification for any corporation that has not affirmatively elected to be taxed as an S Corporation status and for any S Corporation which has had its tax status terminated.

C Corporations are generally used for publically traded businesses as they allow for an unlimited number of shareholders. Most businesses do not intentionally start off as C Corporations. However, depending on the initial capital investment in a company, insurance and employment benefits, a C Corporation may have advantages over an S Corporation. C Corporations may also convert to
S Corporations or limited liability companies (LLCs).