What is a "C" corporation and what are its tax implications?

What is a "C" corporation and what are its tax implications?

Gregg Wind (Partner, Wind Bermer Hockenberg, LLP) gives expert video advice on: Can starting a business decrease my taxes? and more...

A "C" corporation is a separate legal entity. A C Corporation is also a tax paying entity. The C corporation pays tax on its net income. The C Corporation's tax is assessed at graduated rates, in 2007, up to 35%. The states, generally, will assess taxes on "C" corporations as well. There are restrictions on the number of shareholders that an "S" corporation can have but there are no such restrictions on the number of shareholders a "C" corporation may have. When looking at publicly traded corporations, for example, they are always "C" corporations because of the number of shareholders. "S" corporations can work. Currently 75 or less shareholders are permitted for an "S" corporation.