Glossary · Reading the business
C-Corp
In short
A standard corporation structure that is taxed separately from its owners. Profits are taxed at the corporate level and again when distributed to shareholders as dividends, leading to double taxation.
What it means in a deal
While less common for small businesses due to the double taxation issue, some sellers may operate as C-Corps. This structure can complicate an asset purchase because the sale of assets by a C-Corp can trigger corporate-level taxes, significantly impacting the seller's net proceeds and potentially creating a valuation gap. Be sure to understand the specific tax implications for the seller in such a transaction.
Related terms
Common questions about C-Corp
- Can funds from a retirement account, like a 401(k), be used for my equity injection if rolled into a new C-corp via a ROBS plan?
- Are there any specific business entity structures (e.g., LLC, S-Corp) required for an SBA 7(a) loan?
- Can a foreign corporation own a minority (less than 20%) stake in an SBA 7(a) loan applicant business?
- Does my business need to be set up as an LLC or Corporation for an SBA 7(a) loan?
- What specific conditions trigger the requirement for a corporate guaranty in addition to personal guarantees?
- Can a corporate entity provide a guaranty instead of a personal one for some minority owners?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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