S Corporation

For every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!

S Corporation

S corporations are corporations that elect to pass corporate income, losses, deductions, and credit to their shareholders for federal tax purposes. Instead of double taxation, like C corporations, S corporations only incur single taxation and can be most compared to the partnership in this sense.

Qualification Requirements

  • A S corporation must be an eligible entity such as a domestic corporation or limited liability company (which has elected to be taxed as a corporation).
  • The S corporation can have only one class of stock, as opposed to the C corporation that can have multiple levels or classes of stock.
  • The limit on shareholders for S corporations is 100. Spouses are automatically treated as single shareholders.
  • Shareholders must be U.S. citizens or residents and must be natural persons. This means that a shareholder cannot be a corporation or a partnership.
  • Finally, profits and losses must be allocated to the shareholders proportionately to each one's interest in the business.

As far as the rest of the corporate formalities, the S corporation generally has the same requirements as the C corporation.

These include: limited liability protection, classification as a separate legal entity, document filings, corporate structure (shareholders, directors and officers), and finally, the S corporation has the same internal and external corporate formalities such as by laws, stock issuance, meetings, reports and paying annual fees.

Yes, You Can Lose Everything!

You may think that your wealth is safe and that you don't need protection. But don't delude yourself and accept reality — for every 60 minutes you spend making money, spend 60 seconds thinking about how to protect it!

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