C-Corporation C-Corp

A **C-Corporation** is the default US corporate form, governed by state corporation law and Subchapter C of the Internal Revenue Code. Shareholders own stock, elect a board of directors, and the board appoints officers to run the company. The corporation is a separate taxpayer that pays federal corporate income tax on its profits, with shareholders taxed again on dividends, the structure commonly described as double taxation.\n\nDelaware is the dominant jurisdiction because of its modern General Corporation Law, predictable Court of Chancery, and acceptance by investors. There is no minimum capital, but the certificate of incorporation must specify authorized shares, par value, and any preferred stock terms. Multiple share classes, vesting, ISOs, and SAFEs all work cleanly inside a C-corporation.\n\nC-corps must hold annual stockholder and board meetings, keep minutes, file an annual franchise tax report, and submit IRS Form 1120. Qualified Small Business Stock (QSBS) under IRC Section 1202 can exempt up to 100 percent of capital gains on stock held more than five years, which makes the C-corp especially attractive to founders and early employees.

You will pick a C-corporation when raising venture capital, hiring employees with stock options, or planning toward an IPO. Most accelerators including Y Combinator require Delaware C-corp status before investing. Bootstrapped service businesses usually skip it because of double taxation and higher compliance load. Foreign founders with US-based startups also default to a Delaware C-corp because investors and option-holders expect it and it cleanly supports global cap tables.