C Corporation (C-Corp)
Company formation in United States
The C-Corp is best suited for: Venture-funded startups, Companies planning IPO, Businesses seeking US investors, Tech companies, Foreign companies entering US market. 21% flat federal corporate income tax. Dividends taxed again at shareholder level (0–23.8% depending on type). Delaware franchise tax: $400–$200,000+/year based on authorized shares or assumed par value method. State income tax varies (0% in Wyoming/Nevada, up to 11.5% in New Jersey). Must file Form 1120 annually. Foreign owners subject to withholding on dividends (30% default, reduced by treaty).
- Venture-funded startups
- Companies planning IPO
- Businesses seeking US investors
- Tech companies
- Foreign companies entering US market
Key Facts
Step-by-Step Formation Process
Choose your state
Delaware is the default choice for VC-backed startups — over 60% of Fortune 500 are incorporated there. Nevada and Wyoming are alternatives for non-VC businesses.
File Certificate of Incorporation
Submit to the Secretary of State. Define authorized shares, par value, and registered agent. Delaware filing fee starts at $89.
Appoint directors and officers
Minimum one director. Appoint President, Secretary, and Treasurer (can be the same person).
Adopt bylaws and hold organizational meeting
Bylaws govern corporate operations. Organizational meeting authorizes share issuance, adopts bylaws, and appoints officers.
Issue stock
Issue shares to founders. File Section 83(b) election within 30 days if using restricted stock.
Obtain EIN and open bank account
Apply for EIN from IRS. Open a US business bank account — may require a US visit for non-residents.
Required Documents
- Certificate of Incorporation (state-specific)
- Corporate bylaws
- Organizational meeting minutes
- Stock purchase agreements
- Section 83(b) election (if applicable)
- EIN application (IRS Form SS-4)
- Registered agent agreement
- Passport copies of directors/officers
Cost Overview
Tax Treatment
21% flat federal corporate income tax. Dividends taxed again at shareholder level (0–23.8% depending on type). Delaware franchise tax: $400–$200,000+/year based on authorized shares or assumed par value method. State income tax varies (0% in Wyoming/Nevada, up to 11.5% in New Jersey). Must file Form 1120 annually. Foreign owners subject to withholding on dividends (30% default, reduced by treaty).
Pros & Cons
- Can issue stock — essential for VC fundraising
- Well-understood by US investors and lawyers
- Delaware Court of Chancery provides predictable corporate law
- Unlimited shareholders allowed
- Strong liability protection with corporate veil
- Can offer stock options and equity compensation (409A, ISOs)
- Perpetual existence — survives founder departure
- Double taxation: 21% corporate tax + dividend tax on distributions
- More complex compliance: annual meetings, minutes, filings
- Higher accounting costs due to corporate tax return (Form 1120)
- Delaware franchise tax can be expensive for companies with many authorized shares
- Non-resident directors may face withholding tax on certain payments
- Rigid structure compared to LLC
Other Structures in United States
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.