Tax reform is here to stay. Most of the recent talk has centered on pass-through entities like S corporations and partnerships. These tend to be the preferred entity structures for small companies.

But let's not forget C corporations. Even though this ownership structure has always been an option for small business, it just didn't make as much sense. But now that may have changed.

Before you set up a business entity (or consider converting your existing one), let's take a look at five reasons why a C corporation may make sense for your next venture.

1. Lower tax rates.

Before tax reform, the first $50,000 of C corporation profits were taxed at only 15 percent, with the highest rate being 35 percent. But now rates have been lowered to 21 percent for all business income, which is far lower than the highest personal tax rate of 37 percent.

Even though the rate has been reduced, shareholders are still taxed at 15 percent on dividends that are paid. So C corporations still have double taxation. But at least you have control over when you issue a dividend.

2. Income shifting.

Shifting dollars to a C corporation can move income away from your personal tax return, thus allowing for lower adjusted-gross income (AGI). The benefits of lower AGI are that it may limit the phase-out of various deductions and credits. These phase-outs include (among other things) education credits, child tax credits and rental property passive losses.

3. Fringe benefits.

For C corporations, fringe benefits are tax deductible for the company and tax-free to the shareholder-employee. Examples would be health insurance, medical, or health care reimbursement plans, travel, education, and group term-life insurance.

I have clients who incur substantial medical expenses and have used medical reimbursement plans to their benefit. I prefer these medical plans to Health Savings Accounts because of the flexibility and liberal spending limits.

4. Capital gain exclusion.

The sale of certain qualifying C corporation stock is afforded a capital gains exclusion. This little-known provision falls under Section 1202 of the Internal Revenue Code.

Assuming the shares qualify, the capital gain exclusion ranges from 50 percent to 100 percent of the gain. The qualifications can be complex, so you would want to discuss the structure upfront with the appropriate tax and legal professionals. But if a company is being established with the intent of being sold at some point in the future, Section 1202 can be a game-changer.

5. Flexible ownership.

While partnerships offer a very flexible ownership structure, S corporations have numerous ownership rules that restrict: (1) more than 100 shareholders; (2) non-resident alien shareholders; and (3) non-individual shareholders (with a few exceptions). C corporations do not have such restrictions as they allow for unlimited shareholders and shareholder types. This makes them great for entities with many owners.

In addition, since partnerships and S corporations are pass-throughs, they will issue a Schedule K-1 to the owners. These K-1s include the owners allocated share of income or loss from the entity. These amounts must be reported on the investor's tax return.

But for passive investors, these K-1s can be a nuisance and can hold up their personal tax filing. Additionally, as a result of passive loss rules, investors will typically not be able to claim any losses on their tax return.

While it is true that there are many benefits to pass-through entities, they are certainly not the best entity structure for all business owners. So rather than just selecting a pass-through for your next business, you may want to take a closer look at a C corporation. Thanks to tax reform, it may be your best option.