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C Corporations
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Major advantages are limited liability, the efficiency
with which it handles a large number of
shareholders, the ease and legality of buying
and selling its stock. Owners of the corporation
may receive all legal employee benefits, and
have the benefits be tax deductible to the corporation.
The stock of a C corporation can be
owned by other business entities as well as by
individuals.
A serious disadvantage is that all
profits are taxed at the corporate level, then
dividends or profits are taxed to the shareholders,
resulting in double taxation of profits.
Other disadvantages are the required annual
reporting to the state, and annual formalities
such as shareholder and directors’ meetings,
plus lack of privacy and franchise taxes at the
state level.
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