Get our app
Account Sign up Sign in

Start a C-corp FREE*

Register your C corporation for free with a Rocket Legal+ membership


Call us at (888) 627-1186

Start a C corporation
Issue multiple classes of stock and protect shareholder assets with a C-corp.

Start Up Confidently with a new C corporation

Get fast, personalized support to start your C corporation

FREE* with Rocket Legal+

Get your first business registration FREE* as a Rocket Legal+ member and stay compliant with HALF OFF services *See details

Simple and fast protection

We'll take care of your C corporation filing so you can focus on your business

File with confidence

Join the 3+ million businesses that have trusted Rocket Lawyer to help them Start Up Confidently™

Choose a business structure

Compare the advantages and disadvantages of each entity type to find the one that's best for your business.





Sole proprietorship

Managing your business

Limited liability

Incorporation can protect business owners and shareholders from personal financial responsibility for business debts or liability.

Members are protected

Shareholders are protected

Shareholders are protected

Directors are protected

Sole proprietors are not protected

Management flexibility

Some entities are more rigid than others when it comes to structure.

Variety of management structures

Defined by state and federal law

Defined by state and federal law

Strict management laws

No management structure

Favorable for financing

Depending on your goals, certain entity types may be more suitable.

Gains credibility when applying for loans and grants

Can distribute one class of stock to up to 100 people

Can issue multiple classes of stock to unlimited shareholders

Gains credibility when applying for loans and grants

Often more difficult to get loans and cannot issue stock


Compliance requirements vary by state and entity type

Easy to maintain and often most affordable

Payroll requirements may create operational overhead

Requires more complex accounting and potentially more reporting and fees

Typically the most demanding due to tax-exempt status

No requirements or fees

Unlimited lifetime

Succession planning may be important to you. If so, you'll need a business structure that enables a smooth transition.

With the proper planning, LLCs can exist for generations

Existence is not tied to specific shareholders

Existence is not tied to specific shareholders

Existence is not tied to specific directors

No longer exists when the owner quits or passes away

Tax considerations

Tax treatment

Your choice of entity can impact your tax rate and filing options.

Pass-through taxes: Most often, LLC members are taxed on their personal tax returns

Pass-through taxes: S-corp shareholders are taxed on their personal tax returns

Double taxation: C-corp income is taxed at the corporate level first, then again at the personal level

Nonprofits can apply for tax-exempt status and donations are tax-deductible

Sole proprietorships are taxed only on their owner's tax return.

Registration fees

State filing fees are required for all legal entities. As a Rocket Lawyer member, you only pay state fees.

Fees are tax-deductible

Fees are tax-deductible

Fees are tax-deductible

Fees are tax-deductible

No fees

C-corp FAQs

  • How much can businesses save with Rocket Legal+?

    Businesses can save up to $2,500 per year with a Rocket Legal+™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

  • What is a C corporation?

    A C-corp is a subset of the corporation business entity type. Corporations provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. Except for certain instances of fraud or malfeasance, a shareholder is not liable for the debts or obligations of a corporation beyond the shareholder's investment into the corporation.

    A C-corp specifically is a corporation taxed under Subchapter C of the U.S. Code. It is subject to double taxation (at the corporate and individual level), but allows for anyone to be an investor. C-corps also allow for an unlimited number of shareholders and multiple share classes.

  • S-corp vs. C-corp: What is the difference?

    There is no practical difference between an S-corp and a C-corp from the perspective of shielding a company's shareholders from liability. Both are simply corporations offering limited liability protection to their shareholders. The corporate governance procedures are also very similar. Both require bylaws and articles of incorporation, as well as annual shareholder meetings, for example. The major practical difference between them, besides certain qualifications a company must have to be treated as an S-corp, comes from the IRS's tax treatment of each. C-corps are subject to double taxation, while S-corps, much like limited liability companies, are pass-through entities.

  • How is a C-corp taxed?

    A C-corp is its own separate entity for tax purposes. It files and pays its own taxes on any income remaining after accounting for offsetting expenses, credits, and deductions. The income tax rate that a corporation pays is usually different than what an individual pays.

    After the C-corp pays taxes, the remaining income can either be kept within the company as retained earnings and used to fund future growth or it can be distributed to the shareholders in the form of a dividend. Any amount distributed to shareholders is subject to being taxed again though, this time as the income of the shareholder. This is what is known as double taxation.

  • What is double taxation?

    C corporations are subject to double taxation. That means that, for tax purposes, the C-corp is its own separate legal entity that must pay its own income taxes as they come due. Then income taxes must be paid again, this time by each individual shareholder, when dividends are paid out to the shareholders.

    It is important to note, however, that the second layer of taxes is only paid when a dividend is actually paid to the shareholders. Compare this to an S-corp, which is a pass-through entity and pays income tax on the profit of the company, whether or not shareholders receive a payment. So while both layers of a double taxation system may add up to more than what a pass-through entity would pay, the second layer of taxes can sometimes be postponed indefinitely by reinvesting the pre-tax retained earnings of a C-corp.

  • Who can be a shareholder of a C corporation?

    Unlike some other business structures, any U.S citizen, non-citizen, or company can be a shareholder of a C corporation. There are differences, however, in how taxes are handled.

    Non-citizens who reside in the U.S. are taxed in generally the same way as a U.S. citizen. They must report and pay taxes on their income earned worldwide. Non-citizens who are also non-residents are not subject to this requirement. Non-resident aliens, individuals who do not hold a green card and are not 'substantially present' in the U.S., are not subject to capital gains tax on the profit from any sale of an investment in a corporation. They are, however, subject to income tax on any dividends coming from that corporation. Non-citizens may also be subject to the tax laws of wherever they currently live, so consulting with a tax professional is usually a good idea.

  • How many shareholders can a C corporation have?

    C-corps can have an unlimited number of investors. They can also have an unlimited number of share classes. This allows for flexibility as the company grows. Early investors, for example, who need to be persuaded to invest when the company is young and the risks of failure high, can be given preferred shares with rights of control and to distributions greater than investors who come on board after the company is more established. Even as a company becomes larger and less risky, large institutional investors may demand preferential share treatment in exchange for a large investment.

  • How many shares should I issue when forming a C-corp?

    A corporation has authorized shares as well as issued and outstanding shares. It is important for business owners to understand both types.

    Issued and outstanding shares refers to how many shares have been sold to investors or, in other words, how many shares are on the open market and being traded. Authorized shares refers to how many shares could possibly be sold to shareholders without an amendment to the Articles of Incorporation. This number represents the minimum amount a share could be made worth without a shareholder vote.

    The amount of shares to be issued is determined by the percentage ownership an investor is seeking and the amount of shares already outstanding. The investor will also keep an eye on the number of shares authorized, as that represents the maximum amount his or her ownership can be diluted. In setting the number of authorized shares, more is often better for the founders of a company, but some states will charge a franchise tax on the number of shares authorized.

  • Why do venture capitalists prefer C-corps?

    A venture capitalist invests in a company that they believe has high growth potential. This is a company that will attract additional investors in the future and be acquired or become publicly traded. A C-corp best suits these needs. A C-corp can attract an unlimited number of investors with multiple share classes. It is also the only corporate form that can be publicly traded on a stock exchange.

    The downside of a C-corp, the element of double taxation, is also not as important to venture capitalists. They want the earnings of the company to remain within it to be used to fund future growth, not paid out as dividends.

  • How do I change from an S-corp to a C-corp?

    By default, a corporation is a C-corp. To become an S-corp, an IRS election has to be made. To once again become a C-corp, that election must be revoked. To do so, a Statement of Revocation of S Corporation Status should be filed with the IRS. This is a signed letter containing:

    • The corporation's intent to revoke its S-corp status.
    • The corporation's Employer Identification Number (EIN).
    • The number of shares issued and outstanding.

    If the Statement of Revocation is filed in the first quarter of the tax year for a corporation, it becomes effective that same year, but two tax returns must be filed. One for the period the corporation was an S-corp and another for the period after becoming a C-corp. If filed after the first quarter, the revocation becomes effective at the beginning of the next year and only one tax return is required.

  • How much does it cost to form a C-corp?

    C-corp filing fees can vary from state to state, with fees starting at $40 and going as high as $500. You might also encounter annual fees charged by your state of incorporation. 

    The business services team at Rocket Lawyer can help you navigate the processes and systems to ensure you meet all the legal requirements in order to file quickly and correctly. Rocket Legal+ members get their first business registration filing for free, paying only the state filing fees, and also get access to professional services for up to half off, including registered agent services, tax prep and filing, trademark registration, and more.

    If your business does not have a physical address in your state (P.O. boxes are not acceptable substitutions), you may be required to have a registered agent. Registered agents accept official and legal correspondence on behalf of your business. While you are setting up your C-Corp, why not set up Rocket Lawyer as your registered agent at the same time? Better yet, if you have a Rocket Legal+ membership, you can save on your business registration and your registered agent services with the membership that pays for itself.

Popular business entities

Explore more entities to find the best fit for your business.

Start an LLC

LLC registration doesn't have to be confusing. We make it easy. Start an LLC on your own or with others.

Get started

Start an S-corp

Structure your business for generations of success. An S corporation can provide tax benefits and more.

Get started

Start a nonprofit

Make your organization official. Let us help you start your nonprofit on the right path.

Get started

Questions? We’re here to help

Our business specialists have helped incorporate thousands of businesses like yours. We'll walk you through the entire process step by step and answer any questions you might have.

customer care specialist Justina