File Your C-Corp in the USA — Corporate Filing Services

Venture capitalists and institutional investors overwhelmingly invest in C-Corporations for four key reasons. First, C-Corps can issue preferred stock, which is the share class VCs receive. Preferred stock gives investors priority in liquidation events and anti-dilution protections that simply do not exist in LLCs. Second, Delaware C-Corps operate under a mature, predictable body of corporate law — the Delaware General Corporation Law (DGCL) — that investors and their attorneys are deeply familiar with. Third, C-Corps can grant Incentive Stock Options (ISOs) to employees under a formal stock option plan (typically an 83(b) election is filed at grant), which is a major tool for attracting talent. Fourth, C-Corps are the required structure for a future IPO on U.S. stock exchanges. If you plan to raise a seed round, Series A, or beyond, forming a Delaware C-Corp before investor conversations is strongly advised.

Double taxation means corporate profits are taxed twice: first at the corporate level (currently a flat 21% federal corporate tax rate), and then again at the shareholder level when dividends are paid out (qualified dividends are taxed at 0%, 15%, or 20% depending on the shareholder's income bracket). In practice, most early-stage and growth-stage C-Corp startups do not pay dividends — they reinvest all profits back into the business. This means double taxation does not typically affect founders during the growth phase. Additionally, founders and employees who receive Qualified Small Business Stock (QSBS) under IRC Section 1202 may be able to exclude up to 100% of capital gains on the sale of C-Corp stock held for more than five years, subject to eligibility rules. Double taxation becomes a real consideration primarily when a mature, profitable C-Corp starts distributing dividends to shareholders.

Delaware is the overwhelming choice for C-Corp incorporation, especially for startups planning to raise venture capital. Over 60% of Fortune 500 companies and the majority of VC-backed startups are incorporated in Delaware. The reasons are: (1) Delaware's Court of Chancery handles corporate disputes without juries, providing fast and expert resolution; (2) Delaware corporate law is extensively developed and predictable, which reduces legal uncertainty; (3) investors and their counsel are deeply familiar with Delaware corporate documents and terms; (4) Delaware has no corporate income tax on companies that do not operate in Delaware; and (5) Delaware has no minimum capital requirement. If you are building a consumer product, SaaS company, or any startup intending to raise external funding, Delaware C-Corp is the standard. Wyoming C-Corp is an option for businesses that do not plan to raise VC money and want lower state fees.

Yes, absolutely. There are no citizenship, residency, or visa requirements to be a shareholder, director, or officer of a U.S. C-Corporation. Foreign nationals from any country can own 100% of a U.S. C-Corp. This makes the C-Corp structure very popular for international founders building U.S.-market companies. Note that if a C-Corp has non-US shareholders, it cannot elect S-Corp status (S-Corps require all shareholders to be U.S. citizens or permanent residents). Also, foreign-owned U.S. corporations may have specific IRS reporting obligations — for example, if a foreign person or entity owns 25% or more of the C-Corp, the company must file IRS Form 5472 annually. We strongly recommend consulting a U.S. CPA or international tax attorney when setting up a foreign-owned C-Corp to ensure full compliance.

A C-Corp must observe more formalities than an LLC to maintain its legal standing and liability protection. Required formalities typically include: holding at least one annual meeting of the board of directors and one annual meeting of shareholders (which can be done via written consent in many states without a physical meeting); maintaining written bylaws that govern how the corporation is managed; recording meeting minutes and key board resolutions (such as issuing stock, approving major contracts, electing officers); keeping a stock ledger listing all shareholders and their share ownership; filing an annual report with the state of incorporation and paying any required franchise tax (Delaware charges a minimum franchise tax based on authorized shares or assumed par value); and maintaining a registered agent in the state of incorporation. Failure to observe these formalities can lead to "piercing the corporate veil" — a legal concept where courts hold shareholders personally liable for corporate debts. Company Incorp includes registered agent service and provides document templates to help you maintain these requirements.

After your C-Corp is approved by the state, you receive a complete digital formation package delivered to your email. This typically includes: the Certificate of Incorporation (the official state document confirming your corporation's existence); the company's Bylaws template (governing document for how the corporation operates); Initial Board of Directors Resolutions template (authorizing share issuance and officer appointments); Stock Certificate templates for common and preferred shares; a Digital Corporate Seal (used on official corporate documents); and your company's EIN confirmation letter if you ordered EIN service. You will also receive the contact information for your registered agent. These documents are sufficient to open a U.S. business bank account, apply for payment processors, and begin operations.

Both C-Corps and S-Corps are incorporated as corporations under state law and follow the same formation process. The difference is purely at the federal tax level. A C-Corp is taxed as a separate legal entity — it files its own corporate tax return (Form 1120) and pays corporate income tax at a flat 21% rate. An S-Corp has elected special IRS treatment via Form 2553 so that profits and losses pass through directly to shareholders' personal tax returns (Form 1040), similar to an LLC — this avoids the corporate-level tax. However, S-Corps have strict eligibility restrictions: a maximum of 100 shareholders, all of whom must be U.S. citizens or permanent residents, and only one class of stock is permitted. A C-Corp has none of these restrictions. Because S-Corps cannot have foreign shareholders, any startup with international founders or investors must use a C-Corp structure. Additionally, only C-Corps qualify for QSBS tax exclusions and can be used for traditional VC investment rounds.