What You Should Know About S Corps, Part 3

December 17, 2019 by OSYB Staff

You have decided to choose the S corp status – Intuit QuickBooks shares your next steps:

• Register your business as either a sole proprietorship, single-member LLC, partnership or C corporation.
• Ensure availability of your business name in your state
• Register a “Doing Business As” name. 
• Prepare your articles of incorporation. You’ll need to file these with your local Secretary of State.
• Prepare the corporate bylaws. 
• Keep corporate minutes of all board and shareholders meetings. 
• Apply for an Employer Identification Number (EIN) with the IRS.
• Secure permits and business licenses.
• Research whether you qualify for S corp status and ensure that you meet all the essential requirements before applying:
  • Be an eligible, domestic corporation. Insurance companies, financial institutions, and some domestic sales corporations operating internationally are not qualified.
  • Have only one class of stock. 
  • Have no more than 100 shareholders. All of them must consent to S corporation election.
  • Have only shareholders that comprise of individuals. Partnerships, corporations, and non-residents cannot be shareholders.
  • Already have (or be prepared to adopt) one of the following tax years.
• Once your corporation is formed, file Form 2553 within these timeline restrictions:
  • No later than two months and 15 days after the selected tax year begins.
  • Any time during the tax year before the tax year that S corporation status will take effect.

Anytime during the process, consult with a tax professional or attorney, and be in open communications with your board of directors and shareholders to help determine whether the S corp status is your best option.

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For full article: What is an S corp? Everything small business owners need to know

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