Definition of a (C) Corporation

Corporations (also known as C Corporations to disambiguate them from S Corporations) are business entities formed and jointly owned by a group of shareholders through stock.

• C Corps are taxed twice: once at the entity level (Corporation tax on Form 1120), and once at the individual shareholder level. Profits remaining (dividends) after the entity is taxed are passed to individuals, who then pay taxes for their share.
• C Corp shareholders are shielded from losses.
• Benefits deductions for C Corp shareholders (and all employees at the C Corp) are add to payroll as pre-tax deductions.
• C Corps are subject to normal Federal (Income, FICA, FUTA) and State employment taxes (Income, SUI, SDI, etc.) on wages paid to employees, and will file Forms 940 (FUTA Tax return) and 941 (Quarterly Return for Income and FICA taxes) for amounts withheld.

For more information, see the IRS guide to Corporations.