how c corporations work
c corporations can pay corporate taxes on earnings before distributing their profits to their shareholders in the form of dividends if they choose to do so individual shareholders are then subject to personal income taxes on the dividends they receive 2another clear advantage is the separation between management and the owners or shareholders this allows longer continuity of c corporations beyond the life of the owners which can include partial owners called shareholders this allows the institutionalization of these corporations and the possibility of passive income through ownership for the owners 1a c corporation is required to hold at least one meeting each year for shareholders and directors minutes must be maintained to display transparency in business operations a c corporation must keep voting records of the company s directors and a list of the owners names and ownership percentages further the business must have company bylaws on the premises of the primary business location c corporations will file annual reports financial disclosure reports and financial statements 3