Is An S Corporation The Right Choice?

Do you want to form a business, yet limit potential liability and maximize tax advantages? An S corporation might be the perfect choice of classification.

Findlaw.com explains an S-corp's advantages:

An S corporation is a regular corporation that has elected "S corporation" tax status. Being a corporation generally shields owners from the business' liabilities. Being an S corporation offers this perk, plus the tax structure of a partnership. In a partnership (and an S corporation), all of the corporation's profits and losses "pass through" to the owners, who report them on their individual income tax returns. The S corporation itself does not pay any income tax.

This avoids double taxation on profits and allows the offset of business losses with income from other sources. Also, unlike owners of LLCs, S corporation shareholders are not subject to self-employment taxes the way active LLC owners are. Though state laws vary, most states follow the federal model for S corporations and taxes.

The S Corporation Requirement That Is Overlooked

When it comes to forming an S corporation, many entrepreneurs are familiar with bylaws, but they forget about the specifics of voting and shareholder agreements. It is critical to define how the owners operate and to delineate all the personal obligations that are expected of partners. These are issues that the bylaws do not cover.

Defining this information can limit business disputes and help S-corps run as smoothly as possible.

If you are working through any S-corp formation issue, Atlanta S corporation lawyer Craig Lerman is prepared to bring his comprehensive experience and knowledge of these issues to help draft documents in the best possible way.

How To Contact Lerman Law Associates, P.C.

Attorney Craig Lerman prides himself on building long-term relationships with clients. After assisting you in the S corporation process, he can help you resolve your ongoing legal needs. For a free initial consultation regarding the formation of your new business, contact the firm online or call 678-888-5773 or 866-717-0393.