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An S Corporation (S Corp) is a special type of corporation in the USA that meets specific Internal Revenue Code requirements. It allows profits to be passed directly to shareholders and avoids double taxation, similar to a partnership, while still offering limited liability protection.
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S Corporation comes with its own pros and cons which is very important for decision making purposes
Process
Select a unique name for your S Corp that complies with state naming requirements.
Prepare and file the Articles of Incorporation with the Secretary of State in the state where you are forming the S Corp.
Designate a registered agent who will receive legal documents on behalf of the corporation.
Draft corporate bylaws that outline the management structure and operating procedures of the S Corp.
Hold an initial board meeting to adopt bylaws, appoint officers, and address other organizational matters.
Issue stock certificates to the initial shareholders of the S Corp.
Apply for an Employer Identification Number (EIN) from the IRS for tax purposes and to open a business bank account.
Register for any required state and local taxes, including sales tax and employer taxes.
Following are the Compliances that will be required
S Corp profits are not taxed at the corporate level. Instead, profits and losses are passed through to shareholders' personal tax returns and taxed at their individual tax rates.
Shareholders who are also employees must be paid a reasonable salary, which is subject to payroll taxes.
S Corps may be subject to state-specific taxes and annual fees. The amount varies by state.
S Corps must file annual reports and pay associated fees to the state.
S Corps must comply with various IRS regulations, including filing Form 1120S (U.S. Income Tax Return for an S Corporation) and issuing Schedule K-1 to shareholders.
Following are the documents that will be required
US Residents can provide SSN or Driving License.
Non residents who wish to register an LLC will be required to provide Passport Copy.
A detailed business nature will be required from the business owners.
If non resident, a bank statement providing recent bank statement (less than 60 days) would be required
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