by Investing School on April 23, 2010

A C-Corporation is a corporation in the United States that is taxed under the 26 U.S.C. § 11 and Subchapter C of the Chapter 1 in the Internal Revenue Code book. Most major corporations are regarded as C-Corporations for the purposes of Federal income taxes. If a corporation fails to meet the requirements needed to be an S-Corporation then they must file under Subchapter C and will be regarded as a C-Corporation.

One of the major differences between C and S Corporations is that C-Corporations are taxed directly while S-Corporations are not. A corporation can qualify as a C-Corporation regardless of the number of shareholders within the United States or outside the United States.

In order to become a C-Corporation, a creator must choose a business name that is available and that complies with the laws within the state that the creator chooses to do business in. The creator will then need to choose directors for his or her corporation. He or she will then have to file paperwork entitled “articles of incorporation” and will then have to pay a fee. The fee usually ranges from $100 to $800 depended on the state in which the corporation will reside. Bylaws for the corporation will then have to be created. Shortly thereafter, a first meeting for the board of directors must take place. Then the issuance of stock certificates should be distributed to all the initial owners or shareholders in the corporation. Finally, licenses and permits are required in order to operate the corporation.

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