- More extensive record keeping requirements
Corporations typically require more ongoing paperwork than most other business entities in order to stay compliant with the law and maintain their corporate status. This includes holding and documenting annual meetings of shareholders and directors and keeping minutes of important corporate meetings.
- Dividend payments can lead to double taxation
Dividends are paid to shareholders/owners from the after-tax profits of a C Corporation. The dividends received by the owners are then tax personally on dividends received. This means the income is taxed twice, if dividends are paid.
