This section explores significant aspects of the C corporation, how the entity is formed and what needs to be done to maintain it. The following section, Going Deeper into C Corporations, gives you some tools to help you navigate the process of creating and operating a C corporation; it includes a checklist for creating a C corporation as well as sample bylaws and annual meeting minutes with explanations.

The C corporation is the ordinary, traditional corporation. Most know it as just “corporation.” Nowadays the letter “C” is often included as a prefix to prevent confusion, as there’s been a recent rise of new corporate forms such as the S corporation federal tax status (where the “S” stands for small) and the B corporation (where the “B” stands for benefit).

At-A-Glance Chart: C Corporation
C Corporation
General ConceptTerminology
Name“Farm Name, Inc”
Owners/investors are called“Shareholders” or “Stockholders”
Persons who make management decisions are calledThe “Board of Directors” is responsible for making key decisions; the “Officers” are responsible for the day-to-day management.
Creation document is called“Articles of Incorporation”
Organizing document is called“Bylaws”
An owner’s investment in the company is called“Equity Investment”
An ownership share is called“Shareholder Equity” or “Shares”
A payment of the company’s profits to the owners is called“Dividend”
Is there personal liability?Limited to a shareholder’s investment
How many participants can you have?One or more, unless elect S corporation tax status
Are annual meeting required?Required
Are different shareholder classes allowed?Allowed, unless elect S corporation tax status
Is an EIN necessary?Required
Who files the tax return?Entity files an income tax return and pays corporate taxes; individuals also pay taxes on any dividends they receive from the corporation. Option to elect S corporation federal tax status
C Corporation with S Corporation Federal Tax StatusHow many participants can you have?Maximum 100 persons; all must be U.S. citizens and all must be human beings, estates, tax exempt entities, or certain qualified trusts
Are different shareholder classes allowed?Not allowed
Who files the tax return?Pass-through, but entity must file informational Form 1120S with the IRS, distribute Schedule K-1 to each owner and file all Schedule K-1s with the IRS