A C-corporation is a company taxed separately from its owners under the US federal income tax law. Most of the big companies are considered C-corporations. They don’t have any limit to the number of domestic or foreign shareholders. The distribution from profits and earnings of the C-corporation is considered a dividend for income tax.
An S-corporation is an organization that passes corporate losses, income, credit, and deductions to the shareholders for US federal tax. When it comes to federal income tax, the process resembles the process involved in partnerships. Therefore, the income in S-corporation is taxed on shareholder levels and not a corporate level. Payments to the S-corporation shareholders are distributed in a tax-free manner, given that the distributions weren’t previously taxed.