Corporate Transactions
C-Corporation
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A C-Corporation is a separate legal entity owned by its shareholders. C-Corporations are taxed annually on their earnings and the shareholders are taxed on these earnings when distributed as dividends.
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A C-Corporation must register with the California Secretary of State before conducting business operations and file the appropriate paperwork as required by the State.
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A C-Corporation must create bylaws (e.g., how the corporation will operate) that cover items such as shareholder meetings, director meetings, number of officers, and their responsibilities.
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Based on the corporation's separate legal entity status, the owners of the corporation are not liable for the losses of the businesses and creditors may only look to the corporation and the business assets for payment.
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A separate bank account and separate records are required with the C-Corporation.
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The owners have ultimate control of the C-Corporation, but must elect directors who in turn elect officers for the company. The directors make the major decisions, while the officers make the day-to-day decisions.
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A C-Corporation's life is perpetual in nature.
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Ownership is easily transferred through the sale of stock and new owners can be easily added by the issuance of additional stock.
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C-Corporations must pay a minimum franchise tax of $800.
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