An S Corporation is a legal entity that functions much like that of a corporation. The major difference is that stockholders of an S-Corp make an election under Subchapter S to be taxed as a partnership, avoiding unnecessary double taxation. Although this is an added benefit, not every business can function as an S Corporation.
There are several determinants that must be considered for businesses to qualify as an S Corporation. As outlined below, the business must…
have been formed within the United States
have only one class of stock
have no more than 100 stockholders
have stockholders who are U.S citizens or residents
have profits/losses are allocated to stockholders pro rata to each stockholder’s ownership interest within the corporation
It can be easy to form an S-Corp online. Of course the process is much simpler if you follow the steps below:
Find a Reputable Online Incorporation Service-
Finding the right online incorporation service provider is important. Many online incorporation services can assist with the formation of your business, but make sure you hire one that has specific experience forming S Corp. This way you know they are qualified to assist you. Reputable online incorporation service providers will be able to furnish the exact services your business needs to get you off the ground and running. They will fill all the necessary paperwork and have the ability to register your business in little to no time, some even under 24 hours.
Find a Registered Agent-
Once you have incorporated your business using an online formation service, the next step is to find a registered or resident agent. Many online incorporation services can provide registered agents for your business. This again is a great way to take the worry off your shoulders in having to hire a registered agent for your business. Most of the time small business owners hire third party resident agents because they are much more cost effective.