I want to know if I can pay investors through a C corp and what would be the legal and tax implications, or is it better to form a LLC and pay them through that ? Thank You
You need to spend some time to make sure you clearly understand the different tax implication of each form of legal entity.
Without a better understanding of your situation and the sources of your 'investors'; you cannot expect a board like this to be of any benefit to you with the information you have provided.
You could certainly hire a local CPA to get a handle on what you are proposing - there are so many variables, especially when other people's money is involved that you need detailed, not general, help.
A "C" corporation is not a good choice. Better is an "S" corporation, a Limited Partnership or a LLC.
If I do the LLC do I share ownership with the other members and pay them dividends on their investment?
You need to spend some time to make sure you clearly understand the different tax implication of each form of legal entity.
Without a better understanding of your situation and the sources of your 'investors'; you cannot expect a board like this to be of any benefit to you with the information you have provided.
You could certainly hire a local CPA to get a handle on what you are proposing - there are so many variables, especially when other people's money is involved that you need detailed, not general, help.