This is cool, but they should not offer a C corp as the default choice. An LLC should be the default for the vast majority of entrepreneurs. The only reason VC-funded companies are C corps is becaused VC LPs don't want to be hit with taxable income (which would flow through the VC to them). An LLC is much better for a variety of reasons:
- Flow through taxation = you only get taxed once. With a C corp you pay corporate income tax and then you get taxed on any distribution
- If you sell the business, you better hope you have enough leverage to get a stock sale and not an asset sale, because in an asset sale, you're again getting majorly double taxed. The vast majority of exits are asset sales though because they shield the purchaser from unknown liabilities
- From an LLC, you can easily become a C corp. From a C corp, it's majorly difficult (practically infeasible) to become an LLC; you retain optionality in one case but not the other
- Flow through taxation = you only get taxed once. With a C corp you pay corporate income tax and then you get taxed on any distribution
- If you sell the business, you better hope you have enough leverage to get a stock sale and not an asset sale, because in an asset sale, you're again getting majorly double taxed. The vast majority of exits are asset sales though because they shield the purchaser from unknown liabilities
- From an LLC, you can easily become a C corp. From a C corp, it's majorly difficult (practically infeasible) to become an LLC; you retain optionality in one case but not the other