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It is in your best interest to become a C Corporation if you plan to keep profits and other cash in the bank to finance your growth, repay debt, or make other capital expenditures. This is because C Corporations can take advantage of lower initial corporate income tax rates.
C Corporations have the ability to provide greater flexibility in terms of planning and controlling federal income taxes. They can also deduct the cost of certain fringe benefit packages.
One disadvantage of forming a C Corporation is that you run the risk of being taxed twice on your profits...once as a corporation, and again as an individual when you dispense those profits as dividends or when you liquidate the corporation.
