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

Melissa Clark
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Melissa Clark

Head of Content & Customer Marketing at Incfile
Melissa sets the vision for Incfile's content marketing and customer relationship management. Melissa has more than 10 years experience in various marketing roles, and a passion for supporting small businesses as they incorporate and grow. She loves sharing information that will help business owners maximize their LLCs, Corporations and Nonprofits. In her spare time, Melissa is an active member of The Junior League and enjoys running half marathons.
Melissa Clark
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