Ogden UT S-Corp Lawyer
An S-Corporation is the same as a C-Corporation (usually referred to as simply “Corporation”), except S-Corporations are not taxed twice. Corporate profits are taxed twice: the corporation is taxed at the corporate level, money from the corporation flows through to the shareholders, and the shareholders are also taxed. In other words, generally speaking, the same money is taxed twice. S-Corporations are different because they aren’t taxed at the corporate level. Individual S-Corp shareholders are responsible for reporting corporate income, losses, deductions, credit, etc., on their personal tax returns.
Creation of an S-Corp
To create an S-Corp or change status from C-Corp to S-Corp, you must send an application to the IRS on federal form 2553. Once you’ve received your approval, send a copy to the Utah Tax Commission (or the tax commission in whichever state you’re seeking S-Corp status).
Requirements to Create an S-Corp
There are several requirements to be eligible for S-Corporation status, but arguably the three biggest requirements are (1) the corporation can have no more than 100 shareholders; (2) the corporation can have only one class of stock; and (3) the corporation must be domestic (formed in the same state you’re seeking S-Corp status).
Pros & Cons of an S-Corp
Because an S-Corporation is operated exactly the same as a Corporation, refer to our Corporations Page to review the pros and cons.