I Am The Owner Of A Small C Corporation. Should The Corporation Pay The Premiums?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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A closely held corporation, also called a C corporation, is one where a small number of people (often from the same family) run the company and own the stock. Often, these kinds of companies buy insurance (life and disability) for key people in the organization to provide cash in the event of the death or disability of one or more of the principles. Such policies would normally be paid for by the corporation and the proceeds of any claims would be disposed of in accordance with buy and sell agreements and other legal documents drawn up by the corporation’s attorneys.

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