C corporations provide limited liability protection to owners, who are called shareholders, meaning owners are typically not personally responsible for business debts and liabilities. C corporations may also offer greater tax advantages because of an expanded ability to deduct employee benefits, which are most often used by growing businesses.
C corp advantages
C corporations typically provide a number of advantages:
Limited liability protection. Owners are not typically responsible for business debts and liabilities.
Unlimited owners. C corps can have an unlimited number of shareholders.
Easy transfer of ownership. Ownership is easily transferable through the sale of stock.
Unlimited life. When a corporation’s owner incurs a disabling illness or dies, the corporation does not cease to exist.
Raise capital more easily. Additional capital can be raised by selling shares of stock.
Credibility. Corporations may be perceived as a more professional/legitimate entity than a sole proprietorship or general partnership.
Lower audit risk. Generally C corporations are audited less frequently than sole proprietorships.
Tax deductible expenses. Business expenses may be tax-deductible.
Self-employment tax savings. A C corporation can offer self-employment tax savings, since owners who work for the business are classified as employees.
