• A C corporation is a type of business entity or business structure and provides an alternative to sole proprietorship, limited liability companies (LLCs), partnerships and S corps. Many major corporations are c corps, although it is possible for any business to become a C corp if it files the proper incorporation papers. There are both advantages and disadvantages to structuring your business as a C corp.
  
  

Double Taxation

• C corps are taxed on both profits the company makes and on salary the company pays out to employees. This is viewed as double taxation, although salary is sometimes deductible from profit, so the double taxation does not always result. Still, although a C corp tends to have a more favorable tax rate and more tax deductions than other business entities, the double taxation possibility is one major disadvantage of structuring a business as a C corp.
  
  

Costs and Fees

• A C corp must file papers to become incorporated. It also must pay an annual fee to maintain its status as a corporation. Public companies have many additional filing requirements, but most private companies have only this annual obligation. Still, the annual cost of maintaining a corporate identity and the paperwork required on an annual basis can be seen as downsides to C corps.
  
  

Protection

• The major upside to a C corp is the corporation becomes an entirely separate legal entity. The corporation is able to get its own credit and is able to sue in court as a corporate entity. Likewise, if the corporation is sued, only the corporation is at risk. Your personal assets are entirely separated, and no one can take your personal funds to satisfy corporate debts.