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 Qualified Small Business Stock under IRC § 1202 and is the usual form for businesses that plan to 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 taxable entities, including corporations, that do business in Texas or are chartered or organized in Texas (Tex. Tax Code §§ 171.001 et seq.). The franchise tax is calculated on a margin basis rather than on net income.