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Doreen Martel

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Many small business owners believe that S Corporations may be set up without special legal requirements. Learn more about this process when starting a business, whether a traditional brick-and-mortar or online business.

Guide to S Corporations

Business Solution One of the primary advantages of an S Corporation as versus C Corporation status is that you are not subjected to double taxation. In addition, some may not be aware that a business need not be a sole proprietorship in order to qualify for this designation. In fact, here are some facts you may not know:

May have up to one hundred shareholders - This corporate designation may have up to one hundred shareholders. The downside is that you may only designate on class of stock.

Limitations on business types - Financial industry professionals and those who are in the import/export business are not allowed to use this designation.

Set business year - This corporate designation does allow you to set your own fiscal year. All taxes are reported on standard tax returns (form 1040).

Requires IRS approval - Form 2553 must be filed with the IRS before this business entity designation is legal.

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