Vertalis Business Law Glossary
Formation & Liability
C Corporation
Also called: C Corp · C-Corp.
By Tim Nichols
Modern Counsel for Growing Companies
In plain English
A corporation taxed under Subchapter C of the Internal Revenue Code. It generally pays federal income tax on its taxable income, and shareholders may also owe tax on dividends. The corporate structure supports stock ownership and board governance; tax classification and state-law entity form remain distinct concepts.
Types and key distinctions
Double Taxation
Taxation of the same corporate earnings at two levels: first as corporate income and again when distributed to shareholders as taxable dividends. This can occur with C corporations. The actual burden depends on the transaction, deductions, tax attributes, and applicable federal and state rules.