Practice Quiz

Paralegal Exam Prep

Category - Miscellaneous

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What is the difference between a C corporation and an S corporation?
  1. A C corporation is for large businesses and an S corporation is not.
  2. A C corporation must register with the Internal Revenue Service and an S corporation is not required to.
  3. A C corporation must file disclosures with the SEC and an S corporation is not required to.
  4. An S corporation must file disclosures with the SEC and a C corporation is not required to.
  5. A C corporation is taxed separately from its owners and an S corporation is not.
Explanation
Answer: E. The difference between a C corporation and an S corporation is that a C corporation is taxed separately from its owners and an S corporation is not. A C corporation must follow the regulations of Subchapter C of the Internal Revenue Code, while an S corporation has to follow the regulations of Subchapter S. Many corporations are C corporations because of the perceived tax benefits.
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