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C Corporations

C Corporations. Michael Vanacore , Max Keenan, Alex Green. Definition. Corporation- created by a group of shareholders in the business that have ownership in the business. In a C Corporation, the business is taxed separately from its owners. Advantages.

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C Corporations

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  1. C Corporations Michael Vanacore, Max Keenan, Alex Green

  2. Definition • Corporation- created by a group of shareholders in the business that have ownership in the business. • In a C Corporation, the business is taxed separately from its owners.

  3. Advantages • Limited Liability- for directors, shareholders, and employees • Perpetual Existence- shareholders keep business alive even if owner/founder leaves • Enhanced Credibility- suppliers and lenders • Unlimited Potential Growth- stock is sold with no limit with unlimited amount of shareholders • Tax Benefits- taxed separately of corporation, not taxed on income, therefore you can receive employee benefits

  4. Disadvantages • Cost to set up- costs money to establish business, fees that owner has to pay to establish corporation • Double Taxation- income that shareholders get from company is taxed more than once • Regulations and Formalities- has to reach standards to be considered ex. Regular board meetings, and shareholder meetings. • Record Keeping- record all fees and income to report to IRS • Intricate Laws- statutes on the federal and state level

  5. Setting Up C Corp • Select a name- make sure it is available • Select a state- be familiar with its laws for a c corporation • Publish a notice of incorporation • File articles of incorporation (aka Certificate of Incorporation)- signed by officers

  6. Setting Up C Corp Continued 5. Write corporate bylaws- rules and regulations governing corporation, information for shareholders is included 6. Select officers and directors- manages daily activities, the board creates budgets and allocates resources 7. Apply for EIN (Employer Identification Number)- IRS identifies business for taxing purposes

  7. Taxation • Pay taxes at a corporate level • Shareholders pay taxes on dividends received • The C-Corp deducts expenses from their revenues and the remaining becomes the taxable income • Ex. business brings in $150,000 in revenue and $80,000 is spent on operating expenses. Only the remaining $70,000 is taxable income. • This is better than an S-Corp since the shareholders pay taxes regardless

  8. Examples of Ownership • Most big companies are C Corporations Ex. Microsoft, Expedia, Fed Ex, UPS, General Electric, Caterpillar etc…

  9. Citations • http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Corporations • http://www.investopedia.com/terms/c/corporation.asp • https://www.incorporate.com/c_corporation.html • http://www.borelassociates.com/topics/C-Corporation-Advantages-of.pdf • http://www.referenceforbusiness.com/small/Bo-Co/C-Corporation.html • http://www.allbusiness.com/business-planning/business-structures-corporations/2515-1.html • http://www.rocketlawyer.com/article/c-corp-taxation.rl

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