C Corporation
A for-profit corporation taxed as a separate entity under Subchapter C of the Internal Revenue Code; the default federal tax treatment for corporations and the entity type required for Qualified Small Business Stock under IRC § 1202.
A C corporation (often abbreviated "C-corp") is a for-profit corporation taxed under Subchapter C of the Internal Revenue Code. The corporation is treated as a separate taxable entity from its shareholders, paying corporate income tax on its profits at the federal corporate rate (currently 21% under IRC § 11). Distributions to shareholders are taxed again as dividends, producing the so-called "double taxation" feature of C-corps.
C corporation status is the default treatment for entities organized as corporations under state law. To be taxed as an S corporation, a corporation must affirmatively elect S-corp status via IRS Form 2553, subject to eligibility requirements (limits on shareholder type and count, single class of stock). The C-corp form is required for businesses that intend to issue Qualified Small Business Stock under IRC § 1202, raise institutional venture capital (which historically prefers Delaware C-corps), or list shares on a public exchange.
Texas C corporations
A Texas C corporation is formed by filing a certificate of formation under Tex. Bus. Orgs. Code § 3.005 and the supplemental provisions of Chapter 21. Texas does not impose a state corporate income tax but does impose a franchise tax on corporations doing business in Texas (Tex. Tax Code §§ 171.001 et seq.). The franchise tax is calculated on a margin basis rather than on net income.