For many companies with shareholders, profits and losses play a major factor, if not the most important, in determining how the company is run. As such, many companies choose to form an S corporation (S corp) due to the tax benefits that this type of company enjoys. However, ensuring that your company remains eligible to be considered an S corp and understanding the many nuances that come with forming such a business can be difficult.
With the legal support of an experienced and skilled Texas S corp attorney at Slater Pugh, Ltd. LLP, you can evaluate the many legal and professional demands required of S corps in order to make the business formation decision that best suits your company. Call us to discuss forming an S corp and learn about how we work individually with each client to make sure their unique business needs are met.
Eligibility For S Corp Formation
Because of the tax benefits that shareholders within S corporations enjoy, not all companies are eligible to form such a business. Federal mandates require an S corp to meet the following requirements:
- Must be a limited liability company or a domestic corporation
- May not have more than 100 shareholders (Families and spouses generally count as one shareholder)
- May only have one stock class
- Only valid U.S. citizens and residents who are natural people (not corporations or partnerships, with certain exceptions) can be shareholders
- All losses and income must be shared appropriately according to ownership/share in the company
Whether you have questions regarding your eligibility, how to successfully form such a company, or what the benefits of an S corp are exactly, our team at Slater Pugh, Ltd. LLP, can provide you with answers and advice specifically tailored to your unique business situation.
At Slater Pugh, Ltd. LLP, we provide a hands-on, personalized approach for each and every one of our clients and will work hard to help you make the decisions that are best for your company. Call us at (512) 472-2431 to discuss S corps in greater depth and to address your business goals and aspirations more closely with our team of Austin S corp attorneys.