Will Form 1120 C Liability 2023-2024

A C-corporation is the formation of many large and small businesses. If corporate formalities are followed, the owners of a C-corporation will enjoy limited liability protection. Forming a C-corporation is a bit more involved than some other entities. You'll have to file Articles of Incorporation, which requires a fee of around one hundred and fifty dollars and some paperwork filed with the state. You'll also need to identify a registered agent, which can cost between forty to sixty dollars a year. The purpose of a registered agent is to provide a legal address where there are people available during normal business hours to facilitate the legal service of process being served in the event of a lawsuit. Some other requirements include electing directors, issuing stock certificates to initial shareholders, and even creating corporate bylaws during the registration process. C-corporations have a rigid set of taxation responsibilities. For instance, C-corporations are employers by default, so you will technically be an employee. Because of this, you'll need to file monthly payroll deposits your first year and abide by all other employer-related rules and regulations. Unlike S-corporations, your C-corporation will also need to file quarterly estimated income taxes. After taxes are paid, any income leftover and dispersed to shareholders as dividends is taxed again when the shareholders pay their personal income tax. Some states require a minimum annual franchise tax for all C-corporations, even if your business is not profitable. As you might expect, a C-corporation can be rather high maintenance. A few of these ongoing responsibilities include holding annual shareholders meetings and periodic directors meetings, as well as maintaining detailed records of what these meetings consist of (known as recorded minutes). Keeping detailed financial reports of income and shareholder dividends, filing separate income tax returns, and maintaining a total separation between the...