C Corporations are the easiest corporations to form. Owners need to simply file with the secretary of the state they are doing business in, or secretary of the commonwealth if you are filing in Massachusetts, Virginia, Pennsylvania, and Kentucky. Once approved, you then have a corporation.

Mark J. Tarallo, Esq. is a partner in the corporate department at Morse, Barnes-Brown & Pendleton, PC, in Waltham, MA. Mark has extensive experience in the mergers and acquisitions area, representing both buyers and sellers, and has represented companies ranging in size from startups to multinational corporations across a wide range of industries.

Robert Finkel, Esq. is an AV-rated attorney who has more than 25 years experience as a tax and business lawyer, with his practice focused on the areas of individual and business taxation including tax controversy and tax litigation.

A corporation will give you limited liability for the shareholders and the people running the business. This does not however, protect you from your own bad actions. As with the S Corporation, the C Corporation does not provide pass-through tax treatment, in this case you have two levels of taxation.

What does two levels of taxation mean to your business? The corporation itself is responsible for tax purposes is treated as an entity, unlike S Corps, or LLCs, the corporation has profits and loses and files its own tax returns. If there is money to be distributed to shareholders, the shareholders are responsible for filing taxes on those distributions. The same goes for corporate losses, losses are trapped at the corporate level, and can be used to off-set future profits when the corporation becomes profitable.