You are here: Home Law Topics Company Law How to set up a C corporation in China

China Lawyer Blog - We answer your questions

How to set up a C corporation in China

A limited liability company is similar to US C corporation. Creating a C Corporation is more complicated than forming a limited liability company or a sole proprietorship, but there are several tax benefits your company could enjoy.

This is a brief guide for creating a C Corporation, which also is called a regular corporation. Please consult financial and tax advisers for more detailed information.

 

Definition of a C Corporation?

A C Corporation:

 

  • Is legally independent from its owners

     

  •  

  • Is not a personal tax liability for its owners

     

  •  

  • Has a more complex structure than a limited liability company

     

  •  

  • Has a board of directors and shareholders

     

  • Setting up a C Corporation

    A C Corporation is established with state authorities and must abide by corporate laws in the state where it is incorporated. Experts recommend that small-business owners establish corporations in their home states. Check which agency handles this in your state. The secretary of state's office often registers corporations.

    To form a C Corporation, you will need to register your business name, file a certificate of incorporation or articles of incorporation and pay a fee. You will also need to draft corporate bylaws and hold a board of director's meeting.

    Advantages of a C Corporation

    Limited Liability: Owners are not personally liable for the company's losses or debts. Their investments in the company are their only financial risk.

    Tax Benefits: There are a number of tax benefits for a C Corporation. Depending on your business income, creating a C Corporation could lower your tax rate.

    A C Corporation is the only business structure that is not a pass-through entity, which means your net income is taxed at the corporate level before it is distributed to the owners or shareholders, who must also pay tax on the income.

    Creating a C Corporation is more complicated than forming a limited liability company or a sole proprietorship, but there are several tax benefits your company could enjoy.

    This is a brief guide for creating a C Corporation, which also is called a regular corporation. Please consult financial and tax advisers for more detailed information.

    Definition of a C Corporation?

    A C Corporation:

     

  • Is legally independent from its owners

     

  •  

  • Is not a personal tax liability for its owners

     

  •  

  • Has a more complex structure than a limited liability company

     

  •  

  • Has a board of directors and shareholders

     

  • Setting up a C Corporation

    A C Corporation is established with state authorities and must abide by corporate laws in the state where it is incorporated. Experts recommend that small-business owners establish corporations in their home states. Check which agency handles this in your state. The secretary of state's office often registers corporations.

    To form a C Corporation, you will need to register your business name, file a certificate of incorporation or articles of incorporation and pay a fee. You will also need to draft corporate bylaws and hold a board of director's meeting.

    Advantages of a C Corporation

    Limited Liability: Owners are not personally liable for the company's losses or debts. Their investments in the company are their only financial risk.

    Tax Benefits: There are a number of tax benefits for a C Corporation. Depending on your business income, creating a C Corporation could lower your tax rate.

    A C Corporation is the only business structure that is not a pass-through entity, which means your net income is taxed at the corporate level before it is distributed to the owners or shareholders, who must also pay tax on the income.

     

    Add comment


    Security code
    Refresh

    • Goal

    • Fees

    The law blog is running by a China lawyer working for a full-service law firm, offering practical, results-driven advice on employment law, divorce, company law, and other legal issues. Our goal is to manage these issues effectively so that our clients can focus on what they could do best.

    China Lawyer Blog will charge you under your specific circumstances in the following styles:
    (1) Hourly fee arrangements
    (2) Contingency fee arrangements
    (3) Flat fee arrangements
    (4) Percentage fee arrangements

    Learn More...

    ACCREDITED BY

    China Lawyer Blog China Lawyer Society

    China Lawyer

    I am a licensed China lawyer. Most clients are foreign nationals and companies. China Lawyer Blog have associates in Beijing, Shanghai, Tianjin, Guangzhou, Suzhou, Nanjing, Qingdao, Fuzhou, Hainan, Hefei, Wuhan, Xian, Changsha, Xiamen and Hangzhou. Learn More

    Latest Comments

    AWARDINGS

    China law society award


    Style of Service

    This China Lawyer Blog is aiming at providing better knowledge and understanding of Chinese law for foreigners. Should you have any legal issue in China, do not hesitate to contact China Lawyer Blog for consultation. Preliminary consultation is free. Further legal service, however, will be charged in due rate and in due course.

    You are welcomed to ask for a quotation pursuant to your specific circumstance.

    About author

    China Lawyer BLog AuthorPeter Zhu, an experienced China attorney licensed to practice law for more than ten years, the author of this China Lawyer blog, welcomes any enquiry or consultation related to Chinese law.