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Why An S Corporation Could be a Best Bet For Your Business Venture? If you are drinking a business juice, you might not always find it sweet, it could taste sour too. To add sweetness to it, you need to refine your choices and make certain critical corporate moves. The most pertinent of all is the choice you make of the business entity, which if successful can either take you to peek or else bring your shutter down.

Generally, businesses start as a sole proprietor, and they incorporate to fall under the umbrella of C Corporation. But they can also opt for S Corporation and elect to be taxed under the Sub Chapter S of the IRS. S corporation could be best for the small-scale industries as it offers many tax advantages. It is one of the tax designations that can make a lot of difference in the life of the business and the way they pay taxes, handle profits and distribute shares. So if you also have decided to form S Corporation, it could prove to be better for you. For this, you need to form a corporation that qualifies under IRS rules. You can also apply for S Corporation status with the IRS. The IRS approves applications from qualified entities. Limited Liability companies might also elect to be taxed as S Corporations if they qualify. You need to file Articles of incorporation, Draft corporate bylaws and fill with the IRS.


However, to meet all these requirements is also not an easy task, especially for small business entrepreneurs. You need an advice from the industry experts and even have to hire an attorney, whose fees are enormous. So best is that you hire a business formation service provider who could do all the requisite tasks of filling, compiling and submitting documents for you. This entails you are completed with the process of incorporation as an S entity in no time. So what are the advantages of S -Corporation? S Corporation is taxed as a flow-through entity. This means taxes are levied on the income of the shareholders instead of on the corporate, thus preventing double taxation. This makes an S corporation as an attractive choice. It offers Pass-through taxation This means you do not have to pay taxes at the corporate level. Shareholders file the income or losses on their personal income. You get Limited Liability protection for Your Business Actions The owners of the S-Corp enjoy limited liability protection, this means owners are not personally responsible for any debts or legal actions unless they sign a personal guarantee. Do not pay Self-employment taxes You also do not have to pay self-employment taxes. The law designates owners as the employees of the company and not owners. So the owners can skip self-employment taxes that members of an LLC have to pay.


Make future plans with Taxable Gains If you have planned to sell your business or if you wanted to work on a side project, S-Corp could be an appropriate choice. It can help you gain a double advantage. Suppose you have sold your company, then the taxable gains from the sale can be much less what you sell as a C-Corp. S Corporation has unlimited Life Span S Corporation enjoys unlimited Life, business continues to exist even if the owner dies or leave the company. In this structural setup, it is very easy to complete the transfer process by selling the stock. Besides, it is very easy for you to leave your S Corporation status with the IRS at any time. So think about different possible aspects before starting an S Corporation, as your one decision can make or shatter your business objectives.

Why An S Corporation Could be a Best Bet For Your Business Venture?  

For starting an S Corporation, it is very important that you follow the state corporation rules. However, you have to check out whether your...

Why An S Corporation Could be a Best Bet For Your Business Venture?  

For starting an S Corporation, it is very important that you follow the state corporation rules. However, you have to check out whether your...

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