S Corp Entity Election in Houston, TX - Molen & Associates

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S Corp Entity Election in Houston, TX

As a business owner, you have many important decisions to make. One of the most important is deciding which type of business entity to form. There are several different types of business entities, each with its own advantages and disadvantages. One type of business entity that may be a good fit for your business is an S corporation.

S corporations are corporations that have elected to be taxed as pass-through entities. This means that the corporation’s income is taxed at the individual level, rather than at the corporate level. S corporations are often desirable for small businesses because they can provide tax saving opportunities.

If you’re thinking about forming an S corporation in Houston, TX, there are a few things you need to know. First, you must file Articles of Incorporation with the Secretary of State’s office. Once your Articles of Incorporation have been approved, you then need to file Form 2553 with the IRS. Form 2553 is the Election by a Small Business Corporation form. This form should normally be filed within 75 days of the date your Articles of Incorporation were approved.

The Advantages of Forming an S Corporation

There are several advantages to forming an S corporation over other types of business entities. One advantage is that S corporations offer liability protection for their shareholders. This means that if your business is sued, the shareholders’ personal assets will not be at risk. Another advantage of S corporations is that they can help you save on taxes. This is because S corporation income is only taxed at the individual level, not at the corporate level. Finally, S corporations can make it easier to raise capital because they can issue stock to investors.

The Disadvantages of Forming an S Corporation

Of course, there are also some disadvantages to consider before forming an S corporation. One disadvantage is that S corporations have stricter rules and regulations than other types of business entities. For example, S corporations are only allowed to have 100 shareholders or less. Finally, Not all businesses qualify to be S corporations; certain types of businesses, such as banks and insurance companies, are ineligible.

For help with this process or any questions you may have along the way, please contact Molen & Associates. We would be happy to discuss your options further and help get your new Houston business off ground running smoothly!

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