C-Corp LLC Hybrid Benefits

A hybrid business structure combining a C-Corp and LLC to optimize both tax benefits and operational flexibility while maintaining the ability to sell the company in the future.

Key Structure Components:

• C-Corp Setup:

  • Owns all business assets
  • Issues and holds the company stock
  • Eligible for QSBS tax benefits ($3M in tax savings after 5 years)
  • Positioned for potential future sale

• LLC Component:

  • Separate LLCs for each co-founder
  • Functions as management companies
  • Receives payments from the C-Corp
  • Allows for personal income distribution

Additional Benefits:

• Can issue shares to family members through trusts
• Multiple people can take advantage of QSBS benefits
• Maintains flexibility for raising money
• Preserves ability to sell the company

Strategic Considerations:

• Must hold for 5 years to qualify for QSBS
• Requires proper setup and maintenance
• More complex than single-entity structure
• Best suited for companies with proven revenue potential

This structure provides the best of both worlds: immediate income flexibility through the LLC while maintaining long-term tax advantages and sale potential through the C-Corp.