The S-Corp, like the LLC, is a pass-through entity for federal taxes. Basically, that means that the taxable profits or losses for the business are passed through to the business owners, who record these as part of their personal tax filings. Consider this if you think you’ll make a profit right after the incorporation and will distribute it to the shareholders. There are other things to like about S-Corps: ownership can be easily transferred through the sale of stock, business expenses are deductible, and, like C-Corps and LLCs, S-Corps are seen as more legitimate to the general public than a sole proprietorship or general partnership.
Be sure to check outif you’re considering incorporating your company as an S-Corp. Our legal platform is the easiest and most thorough way to form your business. The startup attorneys on our site are available for a free 20 minute consultation so check us out.