S Corporations are for those who think big but want to keep things small. Pass-through taxation combined with the ability to structure compensation means you enjoy credibility and protections without being subject to the same tax rules as mega-corporations.
An S Corporation (“S Corp”) is formed under state law as a regular corporation. This protects each owner’s personal assets from debt. It then makes an IRS election to pass income and losses through to the owner(s), who pay taxes on them when they file their individual returns.
No, an S-Corporation is a special tax classification. Making an S Corporation election—or revoking one—requires a filing with the IRS, not the state. We’re available assist you with making an S Corporation election, though we recommend soliciting guidance from a tax professional as well.
S Corporations must adopt bylaws, designate directors, shareholders, and officers, and issue shares of stock to owners. The S Corporation must hold an organizational meeting (initial meeting of directors) where these actions are taken, along with other activities (like approving a resolution to open a business bank account).You are required to keep corporate minutes (in a corporate record book) and allow shareholders to vote on major corporate decisions. You must also file annual reports to maintain good standing with the state(s) where you operate.
