Where Form 1120 C Pros 2023-2024

Hello Anthony, hello Claudia. Today, we are beginning a wonderful series about C corporations. We want to touch on some basic benefits and not-so-good things about C corps. First, we need to clarify that these are C corporations, not like the ocean. People might be confused, so a C corporation is any corporation that is taxed separately from its owners. It is legally viewed as an individual entity. C Corp determination is not a feature of corporate law. C corporations are something invented by the IRS. So, you don't go to your Secretary of State to say, "I want to file a C corp." Your corporation and other entities can elect to be treated as a C corp, or they will be by default. You have to elect something else if you don't want that. Now, let's talk about the good things first. If you want or need a lot of startup or expansion capital, it's easier to raise because you have stocks to sell. That's important because you don't have to dip into your cash flow. Stockholders profit when the company has its big payday. Another benefit is that there is no shareholder limit for C corps. However, once the corporation has 500 shareholders and $10 million in assets, it is required to register with the SEC. Keep in mind that your corporation may have a limit to how many shareholders it can have, especially if it's a closed corporation. You have to remember that you have two different laws to deal with - the tax code and the corporate code of the state or foreign country where you have incorporated. If you intend to eventually take the company public, it must be a C corp or it can be an LLC to be traded on a national exchange. It...