Definition: A separate, legal entity authorized to act separately from its owners.

Tips: Corporations must choose to be taxed either as a C or S Corporation by the IRS. By default, corporations are set up as C Corporations; however, if you wish to become an S Corporation, then you must file IRS form 2553 with the IRS. C Corporations are subject to double taxation and may not be the most suitable entity for tax purposes when considering selling your business. Thinking of converting from a C to an S Corporation? Consult your CPA, as the IRS imposes a look-back period during which additional taxes may be due if you convert from a C to an S Corporation.