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An S corporation designation provides many of the benefits
of partnership taxation while at the same time, providing
the owners with limited liability protection from creditors.
An S Corporation is a standard corporation that has elected a special tax status with the Internal Revenue Service (IRS). The formation requirements for an S corporation are the same as those for a C Corporation, wherein formation documents must be filed with the appropriate state agency and the necessary state filing fees paid.
The profits and losses of the corporation are ‘passed through’ to the shareholders, meaning that the corporation itself is not taxed for income but that the shareholder is. Shareholders are afforded the same liability protection as a C Corp, up to the amount that an individual shareholder has invested in the corporation. S Corps have an unlimited life and can be transferred through a sale of stock.
With 25 years in worldwide incorporation and a 70% return customer rate, we know all there is to know about business incorporation. Contact us today to find out which option works best for you.
Ready to Incorporate? Click here to go directly to our Incorporation Package Options.
| Advantages |
DISAdvantages |
| Pass-through Taxation: Shareholders are taxed but Corp is not taxed on income |
Owners cannot be non-resident aliens |
| Limited Personal Liability: Only responsible for personal investment |
Fewer than 100 shareholders are required |
Perpetual Existence: Ownership can be
transferred by sale of stock |
More detailed record keeping requirements |
| Business expenses may be tax deductible |
Tax deduction limited to investment in corporation |
C AND S CORPORATION COMPARISON CHART
| C Corporation
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S Corporation
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| Limited Liability Protection |
Limited Liability Protection |
| Perpetual Lifetime |
Perpetual Lifetime |
| No citizenship or residency requirements |
US citizens and resident aliens are required to be owners |
Separate Tax Entity from shareholders: Must pay and file annual income taxes
with IRS |
May not exceed 100 shares or have more than one class of stock |
| Double Taxation: Corporation and Shareholders pay income taxes |
Pass-Through Taxation: Corporation does not pay income tax, while shareholders are taxed based on corporate income/losses |
Send your questions and comments to us by email at info@incbert.com or contact us by phone - Toll-free in USA and Canada: 800-841-3958 (Se Habla Español)
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