Subchapter S Corporation

1022 Words3 Pages

Corporation Research Paper
Giancarlo Palermo
Mr. Plummer
Block: 5
8/28/14
Sub Chapter S A Subchapter S Corporation is a form of corporation that meets the IRS requirements to be taxed under Subchapter S of the Internal Revenue Code. The S corporation is more appealing to small-business owners than a standard corporation. That 's because an S corporation has certain tax benefits and provides business owners with the liability protection of a corporation. S corporations require scheduled director and shareholder meetings, minutes from those meetings, adoption and updates to by-laws, stock transfers and records maintenance.
A nice advantage to owning a S corporation is that it is limited liability which means that the owner/owners of the company …show more content…

An S corporation must follow the same formalities as a regular corporations. Certain fringe benefits are not available to it like this year you can only deduct 60% of health insurance with an S corporation; Regular corporations can deduct 100% of the premium. Regular corporations can deduct all of their disability insurance premiums; a S corporation can’t. Banks may charge more for checking accounts, loans, etc. The S corporation may more frequently require the services of a good attorney to help with the legal aspects of starting and operating the corporation which can be very …show more content…

Creditors cannot pursue the personal assets of the owners to pay business debts. In a sole proprietorship or general partnership, owners and the business are open to having their personal assets vulnerable. LLCs typically do not pay the same taxes as other businesses. LLCs are free to establish any organizational structure agreed upon by the company owners. LLCs can be managed by the owners or by managers, unlike corporations which have a board of directors who oversee the major business decisions of the company and officers who manage the day-to-day affairs. LLC’s also have few restrictions as to who can start one and own one. LLC’s have a distinct advantage over many other business structures for a couple of different reasons like; they are easy to setup, the restriction of personal liability of everyone associated, and they are not taxed as an entity. LLC shares are usually privately owned and not open to the

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