When starting a business, many entrepreneurs focus on getting up and running—but one of the biggest mistakes I see time and again is failing to choose the right business structure. Your business entity isn’t just a formality; it directly impacts your taxes, ability to scale, and long-term wealth accumulation. For years, many advisors have defaulted to recommending pass-through entities like LLCs or S corporations. However, C corporations are making a comeback, thanks to their unique tax advantages, growth potential, and ability to shield wealth. Let’s explore why savvy business owners and franchisees are turning to C corps to fuel their success.
C Corporations Can Often Offer a Lower Tax Burden
One of the biggest advantages of a C corporation is its tax structure. Unlike LLCs or S corps, where profits pass through to the owners and are taxed at their personal income tax rates, C corporation profits are currently taxed at a flat corporate rate of 21% (down from 35% before the 2018 tax reform).
For many business owners, this means a lower overall tax burden—especially compared to LLCs and S corps, where increasing profits can push owners into higher tax brackets.
Additionally, C corporations can carry forward or backward operating losses, reducing future taxable income. If your business experiences losses in the early years, you can strategically apply them to offset future profits and minimize taxes over time.
Eliminate “Double Taxation” Concerns with Smart Structuring
A common concern with C corporations is “double taxation,” where both corporate profits and dividends to shareholders are taxed. However, this can be strategically managed by reinvesting earnings, increasing salaries, and leveraging tax-deductible benefits (which we’ll cover next).
For businesses utilizing ROBS (Rollover for Business Startups) or ROBS Plus (Roth-based ROBS)—which are increasingly preferred by CPAs and CFPs—C corporations offer significant advantages, including enhanced capital gains and income tax protection. These structures help safeguard businesses from current and potential future tax rate increases while providing unique tax-efficient and wealth protection strategies. By leveraging a C corporation, business owners can minimize dividend tax exposure, maximize retirement savings, and shield assets from excessive taxation.
C Corporations Maximize Tax-Deductible Benefits
C corporations allow for a wide range of deductible expenses that other business structures simply don’t. Some of the biggest benefits include:
- 100% deductible health insurance premiums (including for owner-employees)
- Medical reimbursement plans covering out-of-pocket medical expenses
- Employer-funded retirement plan contributions
- Tax-free fringe benefits, such as:
- Group-term life insurance (up to $50,000 per employee)
- Tuition assistance and qualified education expenses
- Employer-provided vehicles and public transportation benefits
- Pre-paid legal services
- Disability
- Long-term care
- Child and dependent care programs
- Employee discounts on company products or services
As healthcare costs rise, these benefits become game-changing for entrepreneurs—especially those in their 40s or older, who face increasing out-of-pocket medical expenses. C corporations allow these costs to be treated as pre-tax business expenses, significantly reducing taxable income.
C Corporations Provide Better Access to Capital
If you plan to raise capital or bring on investors, a C corporation is often the preferred structure. Here’s why:
- C corporations can issue multiple classes of stock, making them attractive to venture capitalists and institutional investors.
- They allow for equity-based funding, which helps businesses raise money without taking on debt.
- They are the only structure that allows entrepreneurs to use their own pre-tax retirement funds (ROBS) to fund their business—completely tax-deferred and penalty-free.
- C corporations can be used to meet SBA loan equity injection requirements, opening up more financing options.
Is a C Corporation Right for You?
- While every business is unique, C corporations offer powerful tax advantages, wealth protection tools, and long-term growth benefits that many entrepreneurs overlook. If structured properly, they can eliminate double taxation risks, reduce overall tax burdens, and maximize profitability while providing better employee benefits and capital-raising opportunities.
- Unfortunately, many CPAs and financial advisors are not well-versed in these strategies, leading business owners to miss out on key advantages. The best way to protect and grow your wealth is to educate yourself and work with experts who understand the nuances of tax-efficient business structures.
Let’s Build Your Business the Right Way
At Benetrends, we specialize in funding strategies, entity structuring, and tax-efficient business planning that set entrepreneurs up for long-term success. Whether you’re looking to fund a franchise, minimize taxes, or protect your assets, our team is here to guide you every step of the way.
Want to learn more? Contact us today for a personalized consultation on how a C corporation can work for your business.
Start smart. Build strong. Keep more of what you earn.
About the Author:
Larry Carnell, CFE, ABI, CFB, is an award-winning entrepreneur and business strategist who has helped thousands of entrepreneurs find, fund, and grow their businesses. With deep expertise in entity structuring, franchising, and innovative tax strategies, he is passionate about helping business owners maximize their financial potential.
Contact Larry: https://www.benetrends.com/larry-carnell
