S corporations offer multiple advantages to entrepreneurs

Forming an S corporation offers a number of advantages for independent salespeople, real estate agents and others, according to certified public accountant and Christian Post blogger John Dillard.

The first advantage to S corporations, according to Dillard, is that business incorporation gives the company instant legitimacy. He says if a business is not incorporated, many state or local governments will not buy from or lend to them.

Dillard also says that S corporations give entrepreneurs personal liability protection in the event that someone tries to sue them. He says that the world is “full of people who are looking to make a fast dollar” and that “courts are full of frivolous cases where greed rather than fairness are the watchword.”

S corporations also offer significant tax benefits to some types of entrepreneurs. Dillard says that currently in an S corporation, after owners salaries are deducted, all shareholder distributions are exempt of employment taxes.

To be an S corporation, the Internal Revenue Service says domestic companies must have fewer than 100 shareholders – all of which must be legal U.S. citizens or residents – and have given out just one type of stock.ADNFCR-3052-ID-19831012-ADNFCR

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Incfile Team

The Incfile team is here to provide small business owners and entrepreneurs with the tips needed to to form an LLC or corporation, and grow your business.
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