What is a Delaware C corporation?

A Delaware C corporation is a type of business entity that is very popular among U.S. startups. Incorporating as a C corporation in Delaware has become a standard practice because of the state's well-developed and business-friendly law, its efficient and expert courts, and the prestige associated with being a Delaware corporation.

One key advantage of a C corporation structure is that it allows for an unlimited number of shareholders and enables the company to issue multiple classes of stock, which can be attractive to venture capital investors. However, a potential downside is the issue of "double taxation." C corporations are subject to corporate income tax, and then shareholders are also taxed on the dividends they receive. Despite this, many startups still choose to incorporate as a Delaware C corporation because of its other benefits.