A legal structure, preferred by investors and many entrepreneurs of startup companies seeking funding. Like Limited Liability Companies, (LLCs) and S-Corporations, C-Corporations protect shareholders from liability in the event of a legal issue or bankruptcy. Unlike LLCs and S-Corporations, C-Corporations may not make an election to pass corporate income, deductions and losses to shareholders for federal tax purposes. However, C-Corporations have no limits on the number of shareholders which may own their shares. Entrepreneurs and investors typically prefer that their startup’s C-Corporation be registered in Delaware. However, Nevada and Wyoming are becoming increasingly popular. Additionally, many entrepreneurs chose to register as a C-corporation in their own state.6
Related Terms
Articles of Organization | S-Corporation | Company By-Laws
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Where Should You Incorporate Your Startup? Delaware!
Tony Lettich
Tony Lettich has previous Business Analysis, Business Valuation, M&A, and Venture Capital experience and currently serves as the Managing Director of The Angel Roundtable and a Partner in Sheehan, Lettich M&A Advisory. He is also a co-founder of FundingSage, which provides valuable information, tools and resources to entrepreneurs seeking to launch and build startups.
