C Corporation

A C Corporation is a form of business that allows its owners the benefit of liability protection.    Ownership of the business resides in the hands of the shareholders who hold stock in the corporation.   Managers will be elected or appointed to manage the day to day affairs of the business. C Corporations will pay income taxes on the earnings of the company.  Profits that are not reinvested back into the business are distributed to the shareholders in the form of dividends.  The shareholders must then pay capital gains taxes on the money distributed as dividends.   Many people consider this a form of double taxation, since the earnings of the business are taxed at both the business level and the personal level.  A C Corporation is subject to the Tennessee Franchise and Excise Tax and must also pay an annual filing fee in order to operate within the state of Tennessee.  This form of business pays more in fees and taxes, however the ability to issue large amounts of stock makes it possible to generate large amounts of cash to operate the business.  To learn more about whether this type of business might be right for you, contact us today.

This information is provided to you so that you might understand the basics of the most common business structures available in Tennessee.  The choice of a business structure is affected by many variables.  The information provided on this webpage is not intended to operate as an exclusive source of information.  Please contact us for assistance in determining what structure might work best in your particular case.

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