Experienced Attorneys Advising S Corporation Owners
Are you a business owner looking to incorporate? For many entrepreneurs, the S corporation is an effective form of business organization with a host of important advantages. However, successfully incorporating as an S corporation can be challenging. That's why you absolutely need a highly-skilled attorney working with you to make sure your company is well-positioned to succeed.
The business lawyers at Brewer & Pritchard, P.C. have extensive experience advising the owners of S corporations, large and small alike, in Houston and in many other jurisdictions. We understand the complex legal and financial rules surrounding these companies. Allow us to help you navigate all those legal challenges.
S Corporation - Advantages and Disadvantages
S corporations have some important advantages and drawbacks compared to C corporations (the more common type of corporation) and other types of business structures. Some of the key advantages of an S corporation include:
- No double taxation - Corporate revenue is passed through to the owners, who report it on their individual tax returns. It is not taxed at the corporate level as with a C corporation.
- Durable existence - Like any corporation, an S corporation continues to exist even if an owner departs.
- Limited liability protection - Shareholders, directors, officers and employees cannot be held personally liable for the corporation's debts and obligations.
- Simpler tax filing - S corporations only file once a year, whereas C corporations must file four times per year - once for every fiscal quarter.
Some of the key disadvantages of an S corporation include:
- Limited shareholders - An S corporation can have only up to 100 individual shareholders, and certain persons and entities - such as C corporations and non-United States residents - cannot be shareholders.
- Expensive formation - Filing Articles of Incorporation is a complex and somewhat expensive process. Depending on the jurisdiction, there may be ongoing fees as well.
- Close tax scrutiny - You can easily lose your S corporation status due to mistakes in the tax filing process. The IRS keeps a very close eye on how these companies distribute their revenue.
The rules surrounding S corporations are extremely complex. That's why it's critical to seek experienced legal help if you are considering this type of corporate structure. Our attorneys are fully versed in all aspects of S corporations as well as other types of business organization.
Don't try to navigate the complex incorporation process alone. Contact Brewer & Pritchard online or call (800) 445-8710 to schedule your appointment. We would be honored to help you find the best option for your business.