S CORPORATION NYC

An S corporation in New York is in short a business entity that was previously a limited liability corporation and has chosen to follow the taxation route of an S corporation.

In this, the members fill an IRS form to get some special tax exemptions. In an S corporation, the business is treated as a separate entity and is taxed separately as well. There are certain advantages for an LLC to opt to be treated as an S Corporation and some disadvantages as well.

If you are unsure whether to form an LLC or not, go through the following lists of the positive and negative aspects of it. It helps you decide what to do during LLC registration.

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s corporation

THE ADVANTAGES:

  • Protected personal Assets: The business and personal expenses are dealt with separately in this business entity structure, so your assets are protected from any scrutiny in case of any issues that your company faces with taxes or finances.
  • Limited Liability: The business owners cannot be held accountable for any debts that a business collects or any damages. There is a certain limitation to which the owner can be held accountable.
  • Credibility: An S corporation is more credible and has more authority than other structures of businesses.
  • External Investors: You can get more external investments through this model as there is a possibility of selling shares so that the new owner can become a shareholder and can get the profits as well. This attracts more investment from external sources and contributes to the progress of the company.
  • Easy transfer of ownership: A bonus in S corporations is that if you wish to sell your company or transfer its ownership to someone else, it is relatively easier.
  • No Self-employment taxes: If a corporation is paying your salary, you are exempt from the self-employment tax

THE DISADVANTAGES:

  • Forming an S corporation: It is a complicated procedure to form an S corporation, but that is where we come in.
  • Strict Tax Obligations: There is a great deal of check and balance that goes into an S corporation. If you make any errors in your taxes, it may cause your company to lose its S corporation status.
  • Not recognized in New York City: Only in the city of New York, an S corporation is not recognized. This leads to the company having to pay double taxes, including New York’s general tax.

 

HOW TO FORM AN S CORPORATION IN NEW YORK?

  1. Choose a corporate name: First of all, you need to decide a name for your corporation, one that is not in use. You can even book a name for a limited time until you file your documents.
  2. File articles of incorporation: This is a legal document that you need before starting a new corporation. We can help you with this step to make it a smooth process.
  3. Find a registered agent: Only an agent present in the same state can be responsible for managing your documents and forms. We can cater to the people of the state of New York only.
  4. Create a corporate records book: This will help you keep a record of the whole process of forming an S corporation. It will keep track of all the original documents that you have.
  5. Form some rules and regulations: Create some laws that will serve as the backbone of your corporation.
  6. Appoint directors and hold a Board Meeting: Next, up, some directors need to be appointed, and a board meeting has to take place so that there is a smooth start to the corporation.
  7. Issue the stock to shareholders: As there are many stockholders, their shares need to be distributed and recorded so that everyone gets the profit accordingly.
  8. Follow your states annual reporting requirements: This check and balance is important and is dependent on hat each state asks for. There also needs to be an annual report provided to the state.
  9. Follow tax and regulatory requirements: This is by far the most important one as if the tax record is found faulty or if there are any discrepancies then the company could lose its status as an S corporation

IN WHICH AREAS DO WE OFFER OUR SERVICES?

We offer our services in the state of New York. This area covers the city of New York and its five boroughs; Manhattan, Bronx, Brooklyn, Queens and Staten Island.