What complicates the operation of C Corporations compared to sole proprietorships?

C Corporations are subject to a variety of complex regulations and rigorous record-keeping requirements that complicate their operation. Unlike sole proprietorships, which can operate with minimal formalities and fewer compliance obligations, C Corporations must adhere to federal and state laws that govern their formation, operation, and reporting.

This includes maintaining detailed financial records, conducting regular board meetings, and preparing and filing annual reports and tax returns. Additionally, C Corporations face specific requirements regarding corporate governance and shareholder communications, which further complicate their operations. These complexities can create administrative burdens and increase costs, making the management of a C Corporation more intricate compared to a sole proprietorship, where decisions can be made quickly and informally.

Overall, the formalities and regulations attached to C Corporations contribute to a more complicated operational structure compared to the simplicity of operating as a sole proprietorship.