C-Corporation (“C-Corp”)

What Is A C-Corporation?

A C-Corporation, or C-Corp, is a form of business entity distinguished by having a tax structure that requires it to be taxed directly as an entity, separately from its owners.

How Do You Form A C-Corp?

The formation of corporate entities is governed by state law. Consequently, the precise requirements and process may differ slightly between states. However, in the vast majority of states, all for-profit corporations are classified as C-Corporations by default. Classification as a flow through taxation entity (an S-Corporation, or S-Corp) requires a specific election to that effect. In order to qualify to make such an election, certain parameters must first be met. If you have questions regarding the specifics of C-Corporation formation, it is probably best that you speak to an experienced corporate lawyer.

What Are The Benefits of a C-Corp?

The primary benefit of a C-Corporation over other alternative forms of business entity is its taxation structure. Like S-Corporations, C-Corporations benefit from limited liability. However, this benefit is common to almost all forms of corporate entity, and is not unique to C-Corporations.

How Are C-Corps Taxed?

The United States Internal Revenue Service (“IRS”) issued a document that details corporate taxation in much, much greater detail than is present in this posting. You can find that document here. In general, however, C-Corporations are taxed at a flat rate reflective of their respective income brackets in addition to a percent of any income above that set amount. The below is a generalization, and should not be relied upon for purposes beyond educational ones:

  • C-Corporations with an income between $0 and $50,000 are taxed at a rate of 15% for every dollar (or fraction thereof) above $0
  • C-Corporations with an income of more than $50,000 but less than $75,000 are taxed at a rate equal to 25% of every dollar (or fraction thereof) above $50,000 plus a flat fee of $7,500
  • C-Corporations with an income of more than $75,000 but less than $100,000 are taxed at a rate equal to 34% of every dollar (or fraction thereof) above $75,000 plus a flat fee of $13,750
  • C-Corporations with an income of more than $100,000 but less than $335,000 are taxed at a rate equal to 39% of every dollar (or fraction thereof) above $100,000 plus a flat fee of $22,250
  • C-Corporations with an income of more than $335,000 but less than $10,000,000 are taxed at a rate equal to 34% of every dollar (or fraction thereof) above $335,000 plus a flat fee of $113,900
  • C-Corporations with an income of more than $10,000,000 but less than $15,000,000 are taxed at a rate equal to 35% of every dollar (or fraction thereof) above $10,000,000 plus a flat fee of $3,400,000
  • C-Corporations with an income of more than $15,000,000 but less than $18,333,333 are taxed at a rate equal to 38% of every dollar (or fraction thereof) above $15,000,000 plus a flat fee of $5,150,000
  • C-Corporations with an income of more than $18,333,333 are taxed at a rate equal to 35% of every dollar (or fraction thereof) earned

Got An C-Corp Question?

Attorney Chris Mutchler may be able to help. Get in touch with The Law Office of Christopher J. Mutchler. If we can’t help you, we’re more than happy point you in the direction of someone who can!

Christopher J. Mutchler, Esq.

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Christopher J. Mutchler
The Law Office of Christopher J. Mutchler | (860) 500-7595 | info@mutchlerlegal.com

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