Note: Running most Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur’s Playbook page of the PKF Texas website.
A corporation formed in the US can elect to be taxed as an S corporation. S corporations are organized in a single state, and ownership is in the form of stock. There can only be one class of stock issued and no more than 100 shareholders. Shareholders can include only individuals and certain estates, trusts, and other S corporations.
To form an S corporation, you must file articles of incorporation with the secretary of the state in the jurisdiction of the organization, adopt bylaws, elect a board of directors, hold organizational meetings, and keep minutes. In addition, an S corporation election must be made with the Internal Revenue Service.
Tune in next week for the final segment on S Corporations entity selection. Due to complexities in every situation, please be sure to contact your tax advisor when maxing entity selection.