S corporations are responsible for tax on certain built-in gains and passive income at the entity level. aren’t allowed to be an S Corp) S Corporation. See how much you can save with our S Corporation … Here's a look at all the requirements needed in filing for an S corporation status. S-Corporation Requirements.

After incorporation, business owners might want to obtain an S corporation status to avail its advantages, especially when it comes to taxation. S Corporation Requirements. Electing S-Corp taxation avoids corporate double taxation and saves on self-employment taxes. This means that S Corporations avoid having to pay what is often referred to as “double taxation” of dividends. The S Corporation requirements are: Only one class of stock; Only 100 shareholders; Owners must be US citizens and individuals; Must not be ineligible (certain insurance companies, financial institutions, etc. The IRS imposes strict guidelines on which businesses qualify. Because the S Corporation is a pass-through entity, this ensures that the corporation’s profits are only taxed once – at the shareholder level. An S-Corporation is a regular corporation with between 1 and 100 shareholders that passes-through net income or losses to those shareholders in accordance with Internal Revenue Code, Chapter 1, Subchapter S.Corporations must meet specific eligibility criteria, and they must notify the IRS of their choice to be taxed as an S-Corporation within a certain period of time.

Before you apply for an S-Corp tax election, learn if you qualify by reviewing the IRS guidelines below. Does your company qualify? This allows S corporations to avoid double taxation on the corporate income. S Corp Requirements. S corp requirements can be a simple process if you know the right steps. An S corporation is a special structure of business ownership by … Deciding which type of corporation is the best for your business can be a confusing and tedious task. S corps provide a wide array of growth and opportunities while offering the protections of a Limited Liability Company ().First, you must establish an Articles of Incorporation document and file it with your Secretary of State. An S-corp requirements list is an important item for those seeking to create an S corporation. To qualify for S corporation status, the corporation must meet the following requirements: Be a domestic corporation; Have only allowable shareholders S Corporation Requirements, Advantages, and Disadvantages. Two types of corporations are recognized by the Internal Revenue Service for the purpose of federal income tax imposition: C corporations and S corporations.