What type of legal structure is referred to as a C Corporation?

A C Corporation is characterized by its taxation process, where the corporation itself is taxed on its earnings at the corporate tax rate. This is the key feature that differentiates it from other business structures. Once profits are distributed to the shareholders as dividends, those dividends are taxed again at the individual shareholders' personal tax rates. This results in what is often referred to as "double taxation," as the corporation is taxed on its income, and then shareholders are taxed again when they receive their dividends.

This understanding of the taxation of C Corporations helps to clarify the financial implications for business owners and shareholders, influencing their decisions regarding how to structure their businesses for optimal tax efficiency.