C corporation refers to any corporation

Corporation

A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...

 that, under United States income tax law

Income tax in the United States

In the United States, a tax is imposed on income by the Federal, most states, and many local governments. The income tax is determined by applying a tax rate, which may increase as income increases, to taxable income as defined. Individuals and corporations are directly taxable, and estates and...

, is taxed separately from its owners. It is distinguished from an S corporation

S Corporation

An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code....

, which is not taxed separately. Most major companies (and many smaller companies) are treated as C corporations for U.S. income tax purposes.

C corporation vs. S corporation

Shareholders of a corporation may elect to treat the corporation as a flow-through entity known as an S corporation. An S corporation is not itself subject to income tax; rather, shareholders of the S corporation are subject to tax on their pro rata shares of income based on their shareholdings. To qualify to make the S corporation election, the corporation's shares must be held by resident or citizen individuals or certain qualifying trusts. Unlike corporations treated as S corporation

S Corporation

An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code....

s, a corporation may qualify as a C corporation without regard to any limit on the number of shareholders, foreign or domestic.

Forming a corporation

In the United States, corporations are formed under laws of a state or the District of Columbia. Procedures vary widely by state. Some states allow formation of corporations through electronic filing on the state's web site or very quickly. All states require payment of a fee (often under USD200) upon incorporation. Corporations are issued a "certificate of incorporation" by most states upon formation. Most state corporate laws require that the basic governing instrument be either the certificate of incorporation or formal articles of incorporation. Many corporations also adopt additional governing rules knows as bylaws. Most state laws require at least one directors and at least two officers, all of whom may be the same person. Generally there are no residency requirements for officers or directors.

Financial statements

Corporations are not required to issue financial statements in the United States. Financial statements may be presented on any comprehensive basis, including an income tax basis. There is no requirement for appointment of auditors.

Distributions

The laws of most states permit distribution of any amount of money or property by a corporation to its shareholders that does not render the corporation insolvent. Any distribution from the earnings and profits of C corporations is treated as dividend for U.S. tax purposes. Earnings and profits is a tax concept similar to retained earnings. Exceptions apply to treat certain distributions as made in exchange for stock rather than as dividends. Such exception include distributions in complete termination of a shareholder's interest and distributions in liquidation of the corporation.

Tax rates

, the IRS

Internal Revenue Service

The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...

 lists the following tax rate schedule for "most corporations", except "qualified personal service corporations" and certain other cases:

Taxable Income ($)		Tax Rate	Of amount over
Over	But not over
$0	$50,000	15%	$0
50,000	75,000	25% + $7,500	50,000
75,000	100,000	34% + 13,750	75,000
100,000	335,000	39% + 22,250	100,000
335,000	10,000,000	34% + 113,900	335,000
10,000,000	15,000,000	35% + 3,400,000	10,000,000
15,000,000	18,333,333	38% + 5,150,000	15,000,000
18,333,333	—	35%	0

See IRS Publication 542, Corporations for details about taxation of corporations.

See also

• Corporate tax in the United States
  Corporate tax in the United States
  Corporate tax is imposed in the United States at the Federal, most state, and some local levels on the income of entities treated for tax purposes as corporations. Federal tax rates on corporate taxable income vary from 15% to 35%. State and local taxes and rules vary by jurisdiction, though many...
  
  
• Blocker corporation
  Blocker corporation
  A blocker corporation is a type of C Corporation in the United States that has been used by tax exempt individuals to protect their investments from taxation when they participate in private equity or with hedge funds...
  
  
• S corporation
  S Corporation
  An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code....