The C Corporation is a type of business structure one could choose for a variety of reasons. The popularity of the C corporation has dramatically grown in the last few years, as entrepreneurs and business owners realized its advantages and potential for growth. If you live in Los Angeles and are considering forming a C Corporation, you may have questions on the registration process, taxes, and other areas. To help you make an informed decision, this article answers some of the frequently asked questions about C Corporations. Local counsel who are knowledgeable in local regulations and experienced with C Corporations may also be of assistance.

What is a C Corporation?

A C Corporation, also known as a C Corp or C-corp, is a type of legal entity that provides the greatest degree of protection from personal liability. This is because a C Corporation is treated as a distinct legal entity that’s separate from its owners.

What are the Benefits of a C Corporation?

C Corporations have several benefits, including:

• It is simple to form and easy to transfer ownership.

• It is able to raise more capital compared to other business structures.

• It has a separate life and is able to own assets and incur debt.

• It can pay tax, hire employees, sue, and be sued.

• It has unlimited capacity to issue stock and investors are liable only for the amount invested.

• It enjoys limited liability and provides protection from personal liability.

• It has The ability to deduct health insurance premiums for self-employed individuals as business expenses.

What are the Disadvantages of a C Corporation?

The following are some of the disadvantages associated with a C Corporation:

• C Corporations face double taxation, meaning that the corporation pays tax on its profits and shareholders pay taxes on the dividends they receive.

• It requires higher compliance costs, such as filing fees and annual reports.

• It is subject to more regulations.

• It has limited ability to deduct losses.

• It is subject to stricter corporate formalities such as holding meetings.

What are the Initial Requirements for Registering a C Corporation?

To register a C Corporation, you will need the following:

• File Articles of Incorporation with the state in which you’re forming your business.

• Draft corporate by-laws.

• Obtain licenses and permits specific to your business.

• Issue stock certificates to initial shareholders.

• Get an Employer Identification Number (EIN) from the IRS.

• Open a corporate bank account.

• Publish notice of formation in local newspapers.

• Hold a meeting for initial shareholders and appoint corporate officers.

Are There Any Additional Requirements for C Corporations in Los Angeles?

Yes, there are. The City of Los Angeles requires C Corporations to pay an annual tax, obtain authorization from the Office of Finance, and renew their authorization every year. This is in addition to any requirements established by the state. It is important to seek the advice of local counselwhen forming a C Corporation in Los Angeles to ensure that you are in compliance with local laws and regulations.

What are the Different Types of C Corporations?

There are two types of C Corporations: Professional C Corporations (PC) and Non-Professional C Corporations (NPC). Professional C Corporations are those that are established by state-licensed professionals such as attorneys, doctors, dentists, and other licensed professionals. Non-professional C Corporations are those that are established by individuals who are not state-licensed professionals.

Last reflections

The C Corporation offers many advantages, including limited liability and the ability to raise more capital. It is important, however, to understand the requirements, taxes, and other regulations associated with forming and maintaining a C Corporation. For individuals in Los Angeles, hiring counsel familiar with local regulations is essential to ensure that your business is complying with all applicable laws.


C Corporation,

Los Angeles,

Business Structure