What is a C corporation?

A C corporation is a very common legal structure for a US subsidiary. A C corporation is taxed separately to its owners, and the dividends are taxed again once they’ve been distributed. C corporations are often quite expensive to manage due to the fact that they have quite complex tax and legal requirements, but they do have many advantages.

If you’re considering setting up a subsidiary in the USA, you might decide to incorporate as a C corporation. A C corporation is a business entity that is taxed separately from its owners. And, this type of corporation is taxed again once dividends have been distributed to shareholders. Registering as a C corporation has some advantages:

  • C corporations offer limited liability to directors, shareholders, officers and employees.
  • C corporations are also very credible in the eyes of suppliers, lenders and customers, and there’s also no limit to the number of shareholders.
  • There’s unlimited potential for growth, and there may be some tax advantages.

However, a C corporation is an expensive way to form a subsidiary in America as there are lot of fees involved, as well as fees payable to the state in which you’re doing business in. There are also lots of regulations and formalities to comply with if you register as a C corporation due to the fact that they get a great deal of government oversight.

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