“C” Corp

When you think of the classic example of a corporation, you are probably thinking of a “C” corporation. Indeed, many of the largest and most successful companies in the United States today are publicly-traded “C” corporations. Such entities are characterized primarily by their ownership structure, which is divided amongst shareholders, sometimes of different types and often of different levels of influence. In a “C” corporation, there are fewer restrictions on shares and share ownership, which can increase flexibility in terms of investment, growth, and risk. Using a “C” corporation also shields the owners from direct exposure to the financial and legal liabilities of the business in many cases.

With all those positives, why wouldn’t everyone establish their business as a “C” corporation? The key reason involves tax law. In the business world, they are the most susceptible to double taxation. While double taxation can occur in other entities, it is most common to the “C” corporation and occurs in a variety of contexts, ranging from basic annual operations to situations where a shareholder is trying to sell their portion of the business. The gut reaction most people have upon hearing this is that it hardly seems fair. Despite the possibility of double taxation however, there are often compelling business reasons to pursue a “C” corporation anyway.

At Garrett, Walker & Aycoth, we understand those reasons and can help you weigh not just the pros and cons of the “C” corporation structure itself, but match its features to your business and growth strategy to determine whether it’s a good fit for you. Call us today at (336) 379-0539 or contact us to schedule an in-depth consultation.


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