Question

In: Advanced Math

how many shareholders can a c corporation have

how many shareholders can a c corporation have

Solutions

Expert Solution

The C corporations offer unlimited growth potential through the sale of stocks, that means you can attract some very wealthy investors.
Usually C corporations have higher number of shareholders than other corporations because of the following reasons.

  • Since C corporation is expensive to start so there is no limit to the number of shareholders in it can have.
  • Perpetual existence of it i.e., even if the owner leaves the company the continuation of the business will not be affected.So it is supposed to have huge number of shareholders.
  • When it comes to corporate ownership, C corporation have no restriction on ownership, which supports them having unlimited growth potential.
  • In C corporation double taxation is inevitable as revenue is taxed at the company level and again as shareholder dividends.

So by enlarge the C corporations has no shareholders limit. However, once the company has $10 million in assets and 500 shareholders, it is required to register with the SEC under the Securities Exchange Act of 1934 which is a law in U.S.A.


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