An S-Corp, or S-Corporation, is a type of business structure that combines the legal benefits of a corporation with the tax advantages of a partnership or sole proprietorship. As a separate legal entity, an S-Corp provides personal liability protection for its owners, known as shareholders. At the same time, it allows profits and losses to flow through to the shareholders’ personal tax returns, avoiding the double taxation often associated with traditional C-Corporations.

The process of forming an S-Corp typically takes several weeks to a few months, depending on a few factors. These include the state in which you’re incorporating, the complexity of your business structure, and the time it takes to obtain any necessary licenses or permits.

First, you’ll need to file Articles of Incorporation with your state’s Secretary of State (we can do that!), obtain an Employer Identification Number (EIN) from the IRS, and draft bylaws and shareholder agreements.

Once you’ve finalized your incorporation at the state level and obtained an Employer Identification Number (EIN) from the IRS, you’ll need to file Form 2553 with the IRS to elect S-Corp status.

The IRS typically processes these requests within 60 days, but processing times can vary depending on factors such as the time of year, the complexity of your request, and any issues that arise during the review process.

The cost to form a corporation varies by state. To view the cost for a specific state, select a package above. Once you select a state, the state fee will be added to your total.

Filing form 2553 with the IRS requires no filing fee. Your corporation is not considered an S-Corp until the IRS grants it that status. 

An S-Corp and an LLC (Limited Liability Company) are both popular business structures that offer personal liability protection for owners. However, there are some key differences between the two:

Taxation: S-Corps are required to pay themselves a reasonable salary and pay payroll taxes on that salary, while the remaining profits are passed through to the owners’ personal tax returns. LLCs can choose to be taxed as a sole proprietorship, partnership, or corporation, depending on the structure that best suits their needs.

Ownership and Management: S-Corps are limited to 100 shareholders, all of whom must be U.S. citizens or residents. LLCs have no such restrictions and can have an unlimited number of owners (known as members) who may be individuals or other businesses. Additionally, S-Corps are required to follow strict ownership and management rules, including the issuance of stock and holding regular shareholder meetings. LLCs have greater flexibility in how they’re structured and managed.

Formalities and Compliance: S-Corps are subject to more formalities and compliance requirements, such as maintaining corporate minutes and adhering to strict record-keeping and accounting practices. LLCs have fewer formalities and less regulatory oversight.

Overall, the choice between an S-Corp and an LLC will depend on a variety of factors, including the size and complexity of the business, the desired tax structure, and the goals of the owners.

You can learn more about S-Corp requirements from the IRS here.

You’ll receive your filed and finalized documents straight to your email.

Incorporating as an S-Corp can provide personal liability protection, tax benefits, and credibility for small business owners. Additionally, S-Corps offer greater flexibility and simplicity in business structure compared to traditional C-Corporations.