Asked on 1/22/2009 by Joel Baris - Lacuna Inc.Answered by ABC Staff
Corporations are ordinary business corporations that have not elected
to be treated as Subchapter S corporations. Forming a C Corporation
allows a business owner to create a separate legal structure that can
shield their personal assets from judgments against the business.
Unless a corporation applies for S Corporation status, the IRS taxes
corporate profits as well as dividends paid to shareholders. Many tax
professionals refer to this scenario as "double taxation."
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