S-Corporation Company
Start your S-CorpWhat is an S-Corp?
An S-Corp offers the limited liability protection of a corporation with a pass-through tax structure which allows shareholders to avoid double taxation.
An S-Corp offers the limited liability protection of a corporation with a pass-through tax structure which allows shareholders to avoid double taxation.
Form an S-Corp to protect your assets and take advantage of all corporate formalities while avoiding double taxation associated with corporations. If you are wondering what is an S-Corporation or how to apply for S-Corp, you have come to the right place.
Benefits of an S-Corp
Liability protection
S-Corp ownership, unlike a sole proprietorship or general partnership, an S-Corp shields your personal assets from your company’s debts and legal liabilities.
Tax advantages
To turn your corporation into an S-Corp, you have to complete an S-Corp filing with the IRS. S-Corps do not pay corporate income taxes and can help shareholders save on self-employment taxes. Profits from an S-Corp are passed through to the shareholders directly, thereby reducing tax liability in most cases.
Public perception
Most large, widely-known companies are organized as corporations. Owning a S-Corp, which is a type of corporation, tells the public that you are a business with serious ambitions.
Business credibility
When your business name has the designation “Inc.” at the end, it lets customers and partners know you are a credible business. It shows that you are a registered corporation approved by the Secretary of State to transact business.
Employee equity incentives
S-Corps allow their owners to issue stock options and stock to their employees without the double taxation of C-Corps.
Tax planning options
S-Corp ownership means you can elect to be taxed as a C-Corp which pays a reduced tax rate on company profits. This provides flexibility in tax planning and optimization. Filing for S-Corp offers potential tax advantages that you should consider when choosing the right entity for your business.
Business loans
As soon as your S-Corp is formed, you can start to build your business credit history. This will help you access business loans and credit that will help your company grow.
LLC use cases
Madelin started a digital marketing business in Florida
By making your S-Corp filing with the IRS, a US resident founder who works in the company, like Madelin, can reduce her self-employment taxes and avoid double taxation while receiving the liability protection provided by a corporation.
Who should NOT use C-Corp
Companies with foreign owners
To qualify as an S-Corp, a corporation may not have any non-resident shareholders. If your company has owners who are not US citizens or permanent residents, your company may not qualify as an S-Corp.
Companies with more than 100 owners
To qualify as an S-Corp, a corporation may not have more than 100 shareholders. If your company will have more than 100 owners, you should not form an S-Corp.
Your company will be in good company
Start your companyHow much does it cost?
$35 - $300
The filing fees for incorporation vary from state to state, ranging from $35 to $300.
How long does it take?
1 to 21 days.
To form a C-Corp takes between 1 to 21 days, and if you're wondering what is a C-Corporation, this should give you an idea of the formation process. If you have a valid US social security number, the process should not take more than a week in most states. The IRS takes longer to issue EINs to companies owned by foreigners, which may add additional time.
