owners generally do not pay themselves large officer salaries, because of the w-2 tax rates which can be extremely high in a state like california. this also muddies up the discretionary compensation numbers when a potential buyer comes along and assesses the P&L on the company. this w-2 income is also taxed twice -- the state takes its cut with payroll taxes and unemployment/disability insurance. if you add sales tax into the mix, an owner is paying upwards of 50% taxes on this money if he decides to buy something nice -- not smart.

to get non-payroll money out of a c-corp and into the owners' pockets, it will be taxed twice, first as corporate income and then as dividend income on the individual owners' tax return. if you have a way around this that doesn't involve laundering money offshore or to shell companies, i'm all ears.

for a smaller, closely held private company with no institutional investors, an LLC taxed as a partnership or something similar (not an s-corp) will yield a lower effective tax rate for the owners of the company and more closely represent what actually is going on.

investors want to invest in a delaware c-corp usually because all of the laws and case precedence are favorable to them.