A primary disadvantage of choosing to establish your business as a Corporation (also known as the classic C Corporation) is double taxation. This technically means that Select one:

a. Corporations always pay both a federal and a state tax

b. the Corporation pays a tax, and then owners may pay another tax when dividends are distributed to them

c. dividend distributions are never taxed, but the Corporation must pay twice as a result

d. dividend distributions are subject to tax at a rate twice as high as normal income