How many shareholders can a C corporation have?

How many shareholders can a C corporation have?

• A. Up to 10
• B. Unlimited
• C. Only 75
• D. Only 5

Answer: (B)

A C corporation can have an unlimited number of shareholders. This characteristic is one of the defining features of C corporations, distinguishing them from other business structures like S corporations, which do have restrictions on the number of shareholders (limited to 100) and who can be shareholders (only U.S. citizens and residents). The unlimited shareholder capacity of a C corporation allows it to raise capital more readily than other types of business entities. This is particularly advantageous when seeking large investments or planning for expansion, as a higher number of shareholders can contribute more capital. Additionally, C corporations can issue multiple classes of stock, further enhancing their ability to attract a diverse range of investors. Understanding this characteristic is essential for anyone studying corporate structures, as it highlights the flexibility and growth potential associated with C corporations compared to others that have more restrictive limitations on shareholder numbers.

A C corporation can have an unlimited number of shareholders. This characteristic is one of the defining features of C corporations, distinguishing them from other business structures like S corporations, which do have restrictions on the number of shareholders (limited to 100) and who can be shareholders (only U.S. citizens and residents).

The unlimited shareholder capacity of a C corporation allows it to raise capital more readily than other types of business entities. This is particularly advantageous when seeking large investments or planning for expansion, as a higher number of shareholders can contribute more capital. Additionally, C corporations can issue multiple classes of stock, further enhancing their ability to attract a diverse range of investors.

Understanding this characteristic is essential for anyone studying corporate structures, as it highlights the flexibility and growth potential associated with C corporations compared to others that have more restrictive limitations on shareholder numbers.