C-corp Flashcards
What is a C-Corp?
A C-Corp is a type of corporation that is taxed separately from its owners under the Internal Revenue Code.
True or False: C-Corps have unlimited growth potential.
True
What is one major advantage of a C-Corp?
Limited liability for its shareholders.
Fill in the blank: C-Corps are subject to __________ taxation.
double
What is a disadvantage of a C-Corp regarding taxation?
C-Corps face double taxation on profits and dividends.
Which of the following is a pro of a C-Corp? A) Limited liability B) Pass-through taxation C) Simplicity of formation
A) Limited liability
True or False: C-Corps can raise capital more easily than other business structures.
True
What is one requirement for C-Corps that may be seen as a disadvantage?
C-Corps must adhere to more regulations and formalities.
What type of taxation do C-Corps experience on their profits?
Corporate income tax.
Fill in the blank: C-Corps can have an unlimited number of __________.
shareholders
What is a potential drawback for C-Corps when it comes to profit distribution?
Dividends are taxed at both the corporate and individual levels.
Which business structure allows for easier transfer of ownership: C-Corp or sole proprietorship?
C-Corp
True or False: C-Corps can be owned by individuals only.
False
What is one reason an entrepreneur might choose a C-Corp?
To attract investment from venture capitalists.
What is a disadvantage of C-Corps related to profits?
Profits may be subject to double taxation.
Fill in the blank: C-Corps are required to hold annual __________.
meetings
What is a major benefit of C-Corps for employee benefits?
They can offer stock options and other benefits more easily.
Which of the following is not a characteristic of a C-Corp? A) Limited liability B) Pass-through taxation C) Perpetual existence
B) Pass-through taxation
True or False: C-Corps can be taxed at both the corporate and personal levels.
True
What is a pro of C-Corps related to business continuity?
C-Corps have perpetual existence, meaning they continue even if ownership changes.
What type of financial statements are C-Corps required to produce?
Annual financial statements.
Fill in the blank: C-Corps must file __________ with the IRS.
Form 1120
What is a disadvantage of C-Corps regarding management?
They require a more complex management structure.
Which business structure typically requires more paperwork and formalities: C-Corp or LLC?
C-Corp
True or False: Shareholders in a C-Corp are personally liable for the debts of the corporation.
False
