Why should you be a S Corporation? 

Should I set up my new company as a Sole Proprietor (or a partnership if multiple people are involved), S Corporation, regular C Corporation or an LLC.?

You have a number of options when you start your dream business. 

There are advantages to each option, except maybe partnership. Let’s deal with this one first as in my opinion it is the least desirable. Even in well written partnership agreements there can be many draw backs. Either partner can bind the partnership to contracts and loans with or without the knowledge or consent of the other partner. The death of either partner or dissolving the partnership presents some difficult, and many times unpleasant, problems. So, an LLC, S Corporation or a C Corporation are much better options. 

Sole proprietor - benefits 

1. Easy of set up
2. No legal agreement needed
3. No government filings other than a possible Fictitious Name filing or licenses needed based on the services or products involved 
4. No separate Federal or State Tax returns to be filed

LLC – benefits 

1. Separate business and personal assets, and protect personal assets
2. Slightly less ongoing meetings and documentations than a corporation
3. May choose to be Taxed as a sole proprietor or an S Corporation
4. Fairly easy to set up – one legal agreement needed 
5. There may be some tax benefits

S Corporation – benefits 

1. Separate business and personal assets, and protect personal assets
2. Most can be set up without the assistance of an attorney
3. There are a number tax benefits to an S Corporation (or LLC taxed as an S Corporation)
   • May be able to reduce the amount of Payroll taxes using Earned Income and passive income
   • May be able reduce SSI and Medicare tax by passing some income from the company to personal 
   • No double taxation that exists with a C Corporation

For a consultation in person or over the phone to explore which is your best option, please use the calendar below to set an appointment.  

When we set up an S Corporation you receive the following:

• We help you set up an independent trade/business using a S Corporation structure. 
• We secure a new Corporate name through the Secretary of State (California). 
• After the name is secured, we will produce Articles of Incorporation and a set of initial By-Laws, secure both Federal and State Tax ID #’s, file the Statement of Information (required by California) and submit an application for the EFTPS program. 
• We then file the Form 2553 S Corporation Election form, secure the Pin for EFTPS and set up the internet password needed to make payments for payroll taxes. 
• We will provide you with the proper documentation to set up your new Corporate Bank account. 
• We will provide you with W-9 to notify your customers of your change in status (you will no longer need 1099 forms to be filed on your S Corp.) 
• We will obtain information to produce minutes for your initial Shareholders Meeting and your First Board of Directors Meeting. 
• We will bundle everything together in a professional binder for your reference and to meet legal requirements of documentation of your Corporation. 

We have several options for payroll and bookkeeping as separate services.  These include everything from full service to set up and training with you doing everything yourself.  We will go over all of the options with no cost or obligation to find the one that is best for you and your situation. 

Finally, we can provide, at a small additional cost, annually everything you need to maintain your Corporation in compliance and good standing with the State of California. 

Ready to find out more?