S Corporation Elections

The business filing experts and MyCorporation will help you elect S corporation status.

Electing S Corp status means that income generated by your business is "passed-through" to your shareholders for computing tax liability. Most businesses start out as a general C corporation and are required to pay income tax on taxable income generated by the corporation. However, as soon as a corporation has been formed, it may elect S Corporation status. Then, the shareholders are taxed like a partnership or sole proprietorship, and not the corporation.

A large majority of our small business customers meet the following S-Corporation requirements:

• Be filed as a U.S. corporation
• Maintain only one class of stock
• Maintain a maximum of 100 shareholders
• Be comprised solely of shareholders who are individuals, estates or certain qualified trusts, who consent in writing to the S Corporation election
• All shareholders must have a US Social Security Number
• Corporate fiscal year ends December 31st

Failure to observe any of the above requirements could revoke your S Corporation status at any time. Whether or not an S Corporation is something that you would benefit from is a decision that only you can make. Please consult your lawyer or CPA for details.

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