INCORPORATION OF S-CORPORATION ✅ BUSINESS ✅ SERVICES

Stage 1. Consultation and Preliminary Analysis on S-Corporation Registration Issues

Lawyer's Actions:

Familiarization with the client's business and the purpose of creating an S-Corporation

Determining the optimal state jurisdiction for registration (e.g., Delaware, California, Texas, etc.)

Explaining the specifics of an S-Corp: shareholder requirements, limitations, tax nuances

Preparing recommendations regarding capital and management structure

Stage 2. Preparation and Submission of Articles of Incorporation

Lawyer's Actions:

Preparation of corporate charter documents in accordance with state law

Verification of uniqueness and reservation of the company name (name must comply with state requirements)

Submission of charter documents to the relevant state authority (Secretary of State)

Payment of state registration fees (included in the cost)

Stage 3. Preparation of Internal Corporate Documents

Lawyer's Actions:

Preparation of corporate bylaws
Preparation of the initial board of directors meeting minutes
Preparation of stock certificates
Providing recommendations for maintaining corporate documentation

Stage 4. Obtaining an Employer Identification Number (EIN)

Lawyer's Actions:

Filing an EIN application with the IRS online or by mail (Form SS-4)
Consultations on using the EIN for bank accounts and tax reporting

Timeline: immediately online or up to 1 week by mail

Stage 5. Filing S-Corporation Election (Form 2553)

Lawyer's Actions:

Preparation and submission of Form 2553 to the IRS for official recognition of S-Corporation status
Consultations on compliance with submission deadlines (the form must be filed no later than 2 months and 15 days after the beginning of the tax year)

S-Corporation

S-Corporation is a business format for those who want to operate "like adults" but without excessive tax pressure. Profit immediately passes to owners and is taxed at their level, so no double taxation. You operate as a corporation — with a board of directors, minutes, and structure — but with a simpler financial approach.

Key Points

You register a corporation (C-Corp), then file an application with IRS to obtain S-Corp status.
Taxes: company doesn't pay federal corporate tax — profits/losses are reported by shareholders (Form 1120-S).
Management: corporate structure — board of directors, officers, meeting minutes.

IRS Requirements

Company must be a corporation (C-Corp → S-Election).
Only individuals as shareholders (no corporations, trusts, or legal entities).
Maximum of 100 shareholders.
One class of stock (all shares have equal profit rights).

Not all business types qualify (e.g., certain financial institutions and insurance companies are prohibited).

Shareholders must be US residents/citizens (non-resident individuals not allowed).

Practical Nuances and Obligations

Form 2553 — to elect S-Corp status; strict deadline (usually first 75 days of tax year).
Reasonable compensation — if you work in the company, pay yourself reasonable salary (otherwise IRS may reclassify distributions as wages).
Maintain corporate documentation: minutes, board decisions, reports — crucial for disputes and due diligence.

States may have their own taxes and requirements — federal S-status doesn't eliminate state obligations.

Why Entrepreneurs Choose S-Corp

Avoid double taxation (federal).
Maintain limited liability — personal assets protected.
Control remains with owners (single stock class suits family businesses).
Suitable for small to medium companies with individual shareholders.

Limitations to Remember

S-Corp not suitable for venture funding with multiple investors and different stock classes.
Cannot attract foreign individual non-resident investors.

If planning rapid scaling and VC funding — C-Corp is usually preferred (better for multiple stock classes and option plans).

Summary

S-Corporation is an excellent solution for small businesses wanting tax optimization and control retention. However, it has limitations for growth and complex capital raising. If you'd like — I'll prepare a simple plan: whether S-Corp status benefits your business and what steps to take.