C-Corporation

A C-corporation is the default federal tax classification for a corporation. It pays corporate income tax on profits, and shareholders pay tax again on dividends, the so-called double taxation.

Despite the tax cost, C-corps are the standard structure for venture-backed startups, companies planning an IPO, and businesses with foreign or institutional investors who cannot hold S-corp shares.

In California, C-corps owe both federal corporate tax and California's 8.84 percent franchise tax (with an $800 annual minimum). The structure has clear governance rules, freely transferable shares, and the most established case law for shareholder rights.