Start a C-Corp — Incorporate Your Business Online
Build for growth, raise capital, and issue stock. A C-Corporation is the gold standard for startups seeking investors, hiring with equity, and scaling beyond a small business. BusinessFormations.com handles your incorporation from name search to state filing.
What Is a C-Corporation?
A C-Corporation (C-Corp) is a legal business entity that is separate from its owners in every way — legally, financially, and for tax purposes. It is the most common corporate structure in the United States and the standard entity type for venture-backed companies.
Unlike an LLC, a C-Corp has a formal governance structure with shareholders (owners), a board of directors (oversight), and officers (management). It can issue multiple classes of stock, which makes it the ideal vehicle for raising capital from angel investors and venture capital firms.
C-Corps are taxed at the entity level at the federal corporate tax rate of 21%. When profits are distributed to shareholders as dividends, they are taxed again at the individual level — this is known as “double taxation.” Despite this, C-Corps remain the preferred structure for high-growth companies because of their ability to raise capital, retain earnings, and offer equity compensation.
Some of the world’s largest companies — Apple, Google, Amazon — are C-Corporations. But you don’t need to be Fortune 500 to benefit from the C-Corp structure.
C-Corp at a Glance
- Separate legal entity from its owners
- Issue common & preferred stock
- Unlimited number of shareholders
- No restrictions on shareholder type or residency
- Perpetual existence (survives ownership changes)
- 21% flat federal corporate tax rate
- Eligible for QSBS capital gains exclusion
Benefits of Forming a C-Corporation
Why C-Corps are the standard for companies building for scale.
Raise Capital from Investors
C-Corps can issue multiple classes of stock — common shares for founders, preferred shares for investors. This is the structure VCs and angel investors expect. If you plan to raise, a C-Corp is effectively required.
Stock Options & Equity Compensation
Attract top talent with Incentive Stock Options (ISOs), Restricted Stock Units (RSUs), and equity grants. These tools are only available through C-Corps and are essential for startup hiring.
Strong Liability Protection
Shareholders’ personal assets are shielded from corporate debts and lawsuits. The corporate veil provides the strongest liability protection available under U.S. business law.
Perpetual Existence
A C-Corp exists independently of its owners. It doesn’t dissolve when founders leave, shareholders sell, or ownership changes. This continuity is essential for long-term businesses and investors.
Retain Earnings at 21%
Profits retained in the corporation are taxed at a flat 21% federal rate — often lower than individual rates. This makes C-Corps efficient for reinvesting profits back into the business.
No Ownership Restrictions
Unlike S-Corps, C-Corps have no limits on shareholder count and no restrictions on who can own shares. Foreign investors, other corporations, trusts, and institutions can all hold stock.
How to Incorporate — Step by Step
We handle every step of the incorporation process. Here’s exactly what happens.
Choose Your State of Incorporation
Delaware is the most popular state for C-Corps — especially for startups seeking investors. Its well-established corporate law, business-friendly Court of Chancery, and investor familiarity make it the default choice. However, incorporating in your home state is simpler if you’re not raising outside capital.
Name Your Corporation
Your corporate name must be unique in your state and include a designator such as “Inc.,” “Corp.,” or “Incorporated.” We check availability and suggest alternatives if needed.
Designate a Registered Agent
Every corporation needs a registered agent to receive legal and government correspondence. We provide registered agent service in all 50 states with a secure online document vault.
File Articles of Incorporation
The Articles of Incorporation (called a Certificate of Incorporation in Delaware) is the formation document filed with the state. It includes your company name, registered agent, share structure, and incorporator information. We prepare and file this on your behalf.
Create Corporate Bylaws
Bylaws are the internal rules governing your corporation — board meeting requirements, officer roles, voting procedures, and record-keeping obligations. They’re not filed with the state but are legally required.
Appoint Directors & Officers
Your board of directors provides oversight; your officers (CEO, Secretary, Treasurer) handle daily management. Initial appointments are documented in your organizational board resolution.
Issue Stock
After incorporation, you must formally issue shares to the founders. This includes setting the authorized share count, par value, vesting schedules (if applicable), and recording the issuance in the corporate minute book.
Obtain Your EIN
Your Employer Identification Number (EIN) is required to open bank accounts, hire employees, set up payroll, and file taxes. We obtain it from the IRS — usually same-day.
Open a Business Bank Account
With your Articles of Incorporation, EIN, bylaws, and our banking resolution, you’re ready to open corporate bank accounts and begin operating.
Maintain Corporate Compliance
C-Corps have ongoing obligations: annual reports, franchise taxes, board meetings, meeting minutes, and stock ledger maintenance. Our compliance alert system keeps you on track.
Why Delaware? The Gold Standard for Incorporation
More than 60% of Fortune 500 companies are incorporated in Delaware — and there are very specific reasons why.
🏛️ Court of Chancery
Delaware’s dedicated business court has no jury trials — cases are decided by expert judges. This produces faster, more predictable outcomes for corporate disputes. Investors and attorneys know the case law well.
📚 Mature Corporate Law
The Delaware General Corporation Law (DGCL) is the most developed body of corporate law in the country. Decades of case law provide clarity on governance issues that other states haven’t resolved.
🤝 Investor Expectation
VCs, angel investors, and accelerators overwhelmingly expect Delaware C-Corps. Standard investment documents (SAFEs, convertible notes, Series A docs) are all drafted for Delaware law. Using another state creates friction.
📈 Stock Flexibility
Delaware allows multiple classes of stock with customizable rights, preferences, and restrictions. This is essential for structuring preferred stock rounds, anti-dilution protections, and liquidation preferences.
🔒 Privacy & Director Protection
Delaware doesn’t require directors or officers to be listed in formation documents. It also allows strong indemnification provisions that protect directors from personal liability for good-faith decisions.
💡 No State Income Tax on Holdcos
Corporations incorporated in Delaware but operating elsewhere don’t pay Delaware corporate income tax. You only pay the annual franchise tax — which starts at $400 per year for small companies.
Do you need Delaware? If you plan to raise venture capital, definitely yes. If you’re bootstrapping a small business, incorporating in your home state is usually simpler and cheaper. Our free assessment will recommend the right state for your situation.
C-Corp Formation Packages
Every package includes state filing. Choose the level of support your corporation needs.
Starter
Basic incorporation filing
- ✓Name availability check
- ✓Articles of Incorporation
- ✓Bylaws template
- ✓Organizational minutes
Growth
Ready to operate & bank
- ✓Everything in Starter
- ✓EIN registration
- ✓Banking resolution
- ✓Registered agent (1 year)
- ✓Compliance reminders
Venture
Investor-ready corporate structure
- ✓Everything in Growth
- ✓Board resolutions & minutes
- ✓Stock certificates & ledger
- ✓Equity documentation
- ✓Expedited filing
- ✓Dedicated specialist
For startups raising capital: The Venture package gives you the complete corporate structure investors expect — Articles of Incorporation, bylaws, board resolutions, stock issuance, and equity documentation. Your attorneys will thank you.
How C-Corps Are Taxed
C-Corp taxation works differently from LLCs and S-Corps. Here’s what you need to know.
Corporate-Level Tax (21%)
A C-Corp pays federal income tax at a flat 21% rate on its profits. This is the corporate tax rate set by the Tax Cuts and Jobs Act of 2017. State corporate taxes may apply in addition, depending on where the company operates.
Because the corporation is a separate taxable entity, it files its own return (IRS Form 1120) and pays taxes independently of its shareholders.
Double Taxation — What It Really Means
When a C-Corp distributes profits to shareholders as dividends, those dividends are taxed again at the individual shareholder level. This is “double taxation” — once at 21% corporate, again at up to 20% individual dividend rate.
However, many C-Corps avoid dividends entirely by reinvesting profits or compensating owner-employees with salary (which is deductible by the corporation).
QSBS — The 100% Capital Gains Exclusion
One of the most powerful tax advantages for C-Corps: if your stock qualifies as Qualified Small Business Stock (QSBS) under IRC Section 1202, shareholders may exclude up to 100% of capital gains (up to $10 million or 10× basis) when they sell.
Requirements include: C-Corp, original issue stock, held 5+ years, and <$50M in gross assets. This is why startup founders choose C-Corps.
Retained Earnings Advantage
Unlike pass-through entities (LLCs, S-Corps), C-Corp profits retained in the business are taxed at 21% — not at the founder’s personal marginal rate, which can exceed 37%+ with state taxes.
If you’re reinvesting heavily into growth (hiring, marketing, R&D), a C-Corp lets you keep more capital working inside the company.
Bottom line on taxes: C-Corps have double taxation on dividends, but most startups reinvest profits rather than distribute them. Combined with QSBS, the 21% corporate rate, and deductible salaries, C-Corps are often more tax-efficient than founders expect. Consult a CPA to model your specific situation.
Corporate Governance Structure
C-Corps have a formal governance hierarchy. Here’s how the pieces fit together.
Shareholders
Shareholders own the corporation. They elect the board of directors and vote on major decisions like mergers, dissolution, and amendments to the Articles of Incorporation. One share = one vote (for common stock).
Board of Directors
The board oversees the corporation’s direction and makes strategic decisions. Directors are elected by shareholders and serve fixed terms. They appoint officers and set corporate policy.
Officers
Officers run the daily operations. Typical roles include CEO (overall leadership), Secretary (records and compliance), and Treasurer (finances). Officers are appointed by the board.
For early-stage startups: It’s common for one or two founders to serve as both directors and officers. As the company grows and takes investment, outside directors are typically added to the board.
C-Corp vs. Other Entity Types
See how the C-Corporation compares to other common business structures.
| Feature | C-Corp | S-Corp | LLC |
|---|---|---|---|
| Personal liability protection | ✓ | ✓ | ✓ |
| Issue stock to investors | ✓ | Limited | — |
| Stock options (ISOs) | ✓ | ✓ | — |
| Unlimited shareholders | ✓ | ≤100 U.S. only | ✓ |
| Foreign shareholders allowed | ✓ | — | ✓ |
| Multiple stock classes | ✓ | 1 class only | N/A |
| QSBS eligibility | ✓ | — | — |
| Pass-through taxation | — | ✓ | ✓ |
| Self-employment tax savings | N/A | ✓ | Via S-Corp election |
| Compliance burden | High | Moderate | Low |
| Best for | Startups / investors | Profitable small biz | Most small biz |
Who Should Form a C-Corp?
A C-Corp is the right choice when you need to raise capital, issue equity, or build for long-term scale.
Venture-Backed Startups
You’re building a product, raising a seed or Series A round, and need a structure that VCs recognize and standard investment documents support.
Companies Hiring with Equity
You want to offer stock options (ISOs), RSUs, or equity grants to attract engineers, designers, and other key hires in competitive talent markets.
Companies with International Shareholders
S-Corps don’t allow foreign shareholders. If you have co-founders, investors, or parent companies outside the U.S., a C-Corp is your only corporate option.
Businesses Planning for Acquisition or IPO
If your exit strategy involves being acquired or going public, a C-Corp provides the cleanest path. Acquiring companies and underwriters prefer (and often require) C-Corp structure.
High-Growth Companies Retaining Earnings
If you’re reinvesting profits into growth rather than distributing them, the 21% corporate tax rate is often more efficient than pass-through taxation at higher personal rates.
Professional Practices (in Some States)
Certain states require specific professions (law, medicine, accounting) to form as Professional Corporations. A C-Corp may be required depending on your state and profession.
C-Corp Compliance Requirements
Corporations have more ongoing obligations than LLCs. Here’s what you need to maintain.
Annual Report
Most states require an annual report updating your corporate information — directors, officers, registered agent, and principal address. Deadlines and fees vary by state.
Franchise Tax
Delaware charges an annual franchise tax ($400 minimum for most small corps). Other states may have their own corporate taxes or fees. Missing payment can result in dissolution.
Board Meetings & Minutes
C-Corps should hold at least one annual board meeting and one annual shareholder meeting. Minutes must be recorded and kept in the corporate minute book.
Corporate Tax Return (Form 1120)
C-Corps file IRS Form 1120 annually. Even if the corporation had no income, a return is typically required. Deadlines are April 15 (or the 15th of the 4th month after fiscal year-end).
Stock Ledger & Records
Maintain an up-to-date stock ledger showing all shareholders, share classes, issuances, transfers, and cancellations. This is reviewed during investor due diligence and audits.
Registered Agent
Maintain continuous registered agent coverage in your state of incorporation (and any state where you’re registered as a foreign corporation). We provide this in all 50 states.
C-Corp Formation FAQ
Answers to the most common questions about incorporating a C-Corporation.
How much does it cost to form a C-Corp?
Our service starts at $0 (Starter). The Venture package at $349 is recommended for C-Corps and includes board resolutions, stock documentation, and a dedicated specialist. State filing fees range from $50 to $500+ depending on the state (Delaware is $89).
Should I incorporate in Delaware?
If you plan to raise venture capital, yes. Delaware’s corporate law, Court of Chancery, and investor familiarity make it the standard. If you’re bootstrapping a small business, your home state is usually simpler and cheaper.
What’s the difference between a C-Corp and an S-Corp?
A C-Corp is taxed at the entity level (21%) and can have unlimited shareholders of any type. An S-Corp passes income through to shareholders but is limited to 100 U.S. shareholders and one class of stock. The “S-Corp” is actually a tax election, not a separate entity type.
Can I convert my LLC to a C-Corp later?
Yes. LLC-to-C-Corp conversions are common, especially when companies raise their first round of funding. The process involves state filings and potentially a tax-free reorganization. We assist with conversions.
How many shares should I authorize?
A common starting point is 10 million authorized shares. This provides enough room for founder shares, employee option pool (typically 10–20%), and future investor rounds without needing to amend your Articles. Par value is usually set at $0.0001.
What is QSBS and why does it matter?
Qualified Small Business Stock (IRC §1202) allows C-Corp shareholders to exclude up to 100% of capital gains (up to $10M or 10× basis) when selling stock held for 5+ years. This is one of the most valuable tax benefits available to startup founders.
Do I need a board of directors from day one?
Yes, a C-Corp must have a board. For early-stage companies, it’s common for founders to be the only directors. As you raise capital, investors typically require board seats as part of the investment terms.
What ongoing compliance does a C-Corp require?
Annual report filings, franchise taxes (varies by state), board and shareholder meetings with recorded minutes, stock ledger maintenance, Form 1120 tax return, and continuous registered agent coverage. Our compliance system tracks all deadlines.
Incorporate Your C-Corp with BusinessFormations.com
The C-Corporation is the engine behind America’s most successful companies — from Silicon Valley startups to Fortune 500 enterprises. At BusinessFormations.com, we make incorporation accessible to founders at every stage, whether you’re filing a Delaware C-Corp for your seed round or incorporating locally for a growing small business.
Our Venture package provides everything investors and attorneys expect: Articles of Incorporation, corporate bylaws, initial board resolutions, stock certificates and ledger, EIN registration, and registered agent service. Combined with our compliance alert system, you get not just a formation but an ongoing corporate governance foundation.
From name availability check to stock issuance, we handle the details so you can focus on building your company. Incorporate in any of the 50 states with transparent pricing, expert support, and the speed that founders demand.
Ready to Incorporate Your C-Corp?
Set up the corporate structure investors expect — with proper governance, stock documentation, and compliance from day one.
Delaware & all 50 states • Investor-ready docs • Expert support
