There are different types of corporations, the most common being a C-corporation.
In a C-corporation the owners, also known as shareholders, are taxed separately from the entity and C-corporations are responsible for paying their own taxes. This creates a form of double taxation, since earnings are paid at a corporate and personal level.
Because of the separation between owners and the corporation, the C-corp offers additional protection to limit the personal liability of its shareholders and employees. Therefore, the legal obligations of the business cannot become a personal debt.
In California, a corporation must be registered through the Secretary of State and it’s required to obtain local permits as well.
