S-Corporation
Unlock Tax Benefits and Flexibility
We make the process of filing as an S Corporation both prompt and hassle-free. Work with Eco-fyle’s team of experts to have confidence in your company’s transition.
Choose S-Corporation and Benefit from Pass-Through Taxation
Protect Your Assets & Reduce Taxes
Congratulations on your growing business. Now let’s make sure both it and you are making the most of your success. By registering your business as an S-Corporation, you can offer yourself many of the benefits that come with becoming a corporation while still retaining a high level of ownership flexibility. Some business owners assume the process of starting an S-Corporation will be too costly or time-consuming for them to handle on top of the day-to-day operations, but this is not the case. There are several beneficial differentiators of an S-Corporation that make this structure useful for small to midsize business owners. The most important are the tax advantages, which we will discuss in more detail below, in our benefits section.
Starting As Low As!
$0 + State Fees
*Filing & Service Fees Included
Benefits of Forming an S-corporation
Asset Protection
S-Corporations also provide owners with limited liability protection, that shields your personal assets from litigation, business creditor claims, and contracts.
Heightened Credibility
Being an S-Corporation may help your business establish more credibility with partners, vendors, employees, and even customers. Attract potential investors by selling shares of stock. You can raise funds without taking on debt.
Avoid Double Taxation
When you become an S-Corporation, you are taxed differently than traditional corporations. Your business income, deductions, credits, and losses are all “passed through” to the owners, rather than being taxed at the corporate level. This change results in lower taxes for you by helping avoid the “double taxation” that occurs with C-Corporations.
Income Splitting
Another huge benefit of owning an S Corporation is the ability to opt to receive both a salary and dividend payments from the corporation. Dividends are not subject to the self-employment tax, resulting in a lower tax bill. However, you must divide your salary and dividends in a way that the IRS determines as reasonable.
Compare Packages
Starter
Our Starter Package jumpstarts your business with essential features, including business name checks, meticulous document preparation, and seamless filing. Ideal for a focused and efficient start.
Essentials
The Essentials Package equips you comprehensively, providing expert guidance from the beginning, along with a registered agent service and EIN acquisition.
Premium
Our Premium Package takes your journey to new heights, encompassing previous benefits and adding an essential operating agreement and corporate kit.
Frequently Asked Questions
Let us handle the heavy lifting. Eco-fyle will complete and submit all the paperwork, including your Articles of Incorporation, sample bylaws,
and other documents, to ensure your S-corporation filing process goes smoothly.
The IRS’ qualification requirements for S-Corporations are notoriously strict but do not add much hassle to your plate, especially when you have professionals on your side. They are as follows:
- Your company must be a domestic corporation.
- You may only have one class of stock.
- You cannot have more than 100 shareholders.
- All shareholders must be U.S. citizens or legal residents
- Allowable shareholders are individuals, certain trusts, and estates.
- Unallowable shareholders are partnerships, corporations, or non-resident aliens
Entities That Are Ineligible As S-Corporations, Include:
- Certain financial institutions
- Insurance companies
- Domestic international sales corporations
While the two are similar, S Corporations have a few advantages over LLCs.
- Shareholders of S-Corporations can sell their ownership interest without the approval of other shareholders, giving you much more freedom.
- S-Corporations also reduce your liability for self-employment taxes.
Yes, if you fail to meet all of the requirements of S Corporations status, you can involuntarily lose said status. If this happens, you may not re-elect for a minimum of five years.
You should always carefully consider the pros and cons of each structure before choosing the best for your business. Typically, if you are planning on distributing a majority of your earnings to shareholders, an S Corp Status can be helpful.
Request a Consultation
The team at Eco-fyle is eager to meet you and help you pursue your goals of
incorporation. Request a consultation with one of our specialists!
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