What Is a C Corporation (Taxes)?

A C corporation is a business entity that pays its own income taxes at the flat federal rate of 21%. When the company pays dividends to shareholders, those are taxed again on the shareholders' personal returns — this is called "double taxation." C corps are the structure used by most large public companies. They're often chosen by startups seeking venture capital or companies planning to go public. The 21% corporate rate can actually be favorable for high earners who want to retain profits in the business.