A Type C Corporation, also known as a C-Corp, is a separate legal entity from its owners, offering limited liability protection. However, it faces double taxation, wherein the corporation is taxed on its profits, and shareholders are taxed on dividends received. This structure is ideal for large-scale businesses seeking to reinvest profits.

On the other hand, a Type S Corporation, or S-Corp, is a pass-through entity, meaning profits and losses pass through to shareholders, avoiding double taxation. However, it has strict eligibility criteria, such as limitations on the number and type of shareholders.

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