When does it make sense to have a C corporation?
C corporations pay a tax on their profits and then if dividends are paid out, the shareholder pays a separate tax on those dividends too. Combined taxes on both can often be higher than the tax paid in a personal tax on the same profits if flowed through a Sub S company structure.
So why have a C company?
First you might need one if you have more than 100 shareholders, as in larger owned companies. Second, you might want one if you have a personally owned firm and want to put most of the earning into a age weighted profits pension plan when you are older, or if you have a lot of medical expenses which ordinarily if put into your personal return you would lose or have greatly diminished.In both of these cases, these become deductible to the company as expenses and are not income to the shareholder. Great outcome.
Third, you might desire one if you expect to reinvest your profits for a number of years into your business, rather than pay the profits out to yourself. The reason for this is the taxes inside a C are often less but only if you retain the profits inside for investment. Ultimately though it will cost you extra as the profits are paid out to the shareholders. In the meantime though you get that extra benefit.
