Business Corporations


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  • A regular business corporation is a “for-profit” corporation that is a separate entity from its owners for both legal and tax purposes.
  • It is formed at the state level with each state setting the requirements for formation.
  • All business corporations have the same legal structure. The owners are called shareholders or stockholders. The shareholders elect the directors who make the broad policy decisions for the corporation and appoint the officers of the corporation. Every corporation must have a president, chief financial officer (or treasurer), and secretary.
  • For tax purposes, a business corporation is classified as a C Corporation or an S Corporation. These classifications only determine how the corporation is taxed. They have no impact on the management structure of the corporation nor do they affect or diminish the limited liability protection of the corporation in any way.
  • In a C Corporation, profits and losses are taxed or treated at the corporation level, while in an S Corporation the profits and losses “pass through” the corporation and are reported on the personal tax returns of the shareholders.

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