Business Entity Selection: C-Corp vs LLC vs S-Corp
Written by Aparna Devalla, CPA
Curated by Rubric Financial
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C-Corporation
- Required by virtually all institutional investors (VCs, angels), allowing for preferred stock classes, unlimited shareholders, and standard equity incentive plans
- Subject to corporate tax (21% federal) with potential double taxation on dividends, though this rarely matters for startups reinvesting all profits
- Delaware C-corp is the default for venture-backed startups, with established case law, business-friendly courts, and investor familiarity
- Enables ISOs, QSBS eligibility, and the standard fundraising infrastructure (SAFEs, convertible notes, priced rounds) that investors expect
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GlossaryS-corp vs C-corp vs LLC
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