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