The Organizational Structure Of A C Corporation Essay
A C corporation is the standard corporation, while S corporation, its counterpart, has a special tax status with the IRS. If a new corporation is formed, it is by default a C corporation. “A corporation or C corporation is an independent legal entity that is owned by the shareholders (reference180.com).” The independent legal entity means that a corporation is given many of the same legal rights as a person. This means that a corporation can sue or be sued and is liable for the actions that it did not the shareholders.
A corporation is more complex compared to the other organizational structure such as sole proprietorship, partnership, and limited liability company (LLC).
It is highly regulated and involves a lot of paperwork in order to keep the company’s corporate status. To form a corporation, the prospective shareholders need to file a charter document usually with the Secretary of State. The corporation is more suited for more establish and large companies. A corporation is also tax separately from their owners. They have to file corporate tax returns and pay taxes on their profits. Those profits are then distributed to the shareholders and the shareholders have to pay taxes on the distribution.
b) Describe the organizational structure of an LLC
“LLC or Limited Liability Company is a hybrid business entity combining the benefits of a corporation and a partnership, presumably giving them the best of…