Benefits of forming a C Corporation

Ability to raise capital

C Corps can get money—or “capital”—by selling shares. The key is to convince investors that your company will be profitable in the future, and the value of shares will rise. This is especially helpful if you have a great idea for a business, but don’t have the cash to get it off the ground.

Liability protection

A lot of entrepreneurs choose to form a C Corporation because it protects them. When you own a sole prop, your money and the company’s money are one and the same. If your business runs out of money, so do you. If the business gets sued, you get sued as well. But a C Corp has separate legal and financial status. If bad things happen to your business, the corporation’s money is on the line. Your personal assets are safe.

Long life expectancy

Since C Corporations exist as separate legal entities, they don’t automatically dissolve when an owner leaves. For instance, say you and a business partner share ownership in a C Corp. One day, your partner decides to leave the business. They can sell off their shares, and the company keeps running. In the same situation, a different business entity—like an LLC—would dissolve. But a C Corp can roll with the punches.