How to form an S-corporation for Appliances

Introduction

An S-corporation is a type of business entity that has a number of distinct features. The most important benefit is tax savings, which can be achieved by the shareholders and the corporation. This article explains how to form an S-corporation for your appliances and other appliances.

Overview

• An S-corporation is a special type of corporation that has made a special election with the IRS to be taxed as a subchapter S corporation. The tax benefits of an S-corporation include:
• Taxed as a partnership for federal income tax purposes, but treated as a corporation for federal unemployment tax purposes.
• No income, estate or gift tax on transfers between shareholders and their corporations.
• No unrelated business income tax (UBIT).
• Shareholder eligibility rules are more liberal than those for C corporations.

Meet with your lawyer or accountant

It’s important to discuss the pros and cons of forming an S-corporation with your lawyer or accountant before you begin. They can help you decide if this is the right option for your business.

Your lawyer or accountant will also be able to tell you how much it will cost to form an S-corporation, what legal requirements must be met, and whether there are any other issues that need consulting on.

Select a corporate name and have it approved

When you form an S corporation, you will need to select a name for your corporation. The first step is to ensure that the name is available in the state where you are forming the corporation. It’s also important to make sure that no one else already owns a similar or identical corporate name in that state.

When choosing a name for your company, keep these things in mind:

• Select a unique and memorable name. Avoid using words like “incorporated” or “corporation” if they don’t help make your company stand out from other businesses.
• Keep it short and simple; avoid long names (and especially those with difficult spellings) if possible!

File the Articles of Incorporation

This is a legal document that details your company’s name and purpose, as well as its ownership structure. You will also need to file Articles of Incorporation with your state’s secretary of state or other state agency if it has one.

Hold an initial meeting of the board of directors

The board is responsible for making major decisions about your corporation, such as approving major contracts or lease agreements. The board can be made up of one or more people and is elected by the shareholders.

The process of electing a president, secretary, and treasurer is similar to that of a sole proprietorship or partnership: One person serves as president; one serves as secretary; and another serves as treasurer.

Create the corporate bylaws

You will need to create an S-corporate bylaws document. This document should include the following:

• A purpose statement of why your corporation exists (i.e., you want to sell appliances).
• A statement of authority that gives the board of directors the power to manage and direct the business and affairs of a corporation in accordance with its articles or bylaws, including extending credit, borrowing money and making contracts.
• A statement of capitalization that outlines how much money each owner must contribute annually for maintenance purposes and other expenses such as legal fees associated with maintaining records for your business activities within state regulations.
• A list of members who own shares in your company including names/addresses/phone numbers where applicable so they can receive notices sent out via mail like bills coming monthly etcetera – this would help keep track who owes money versus people who’ve paid back loans owed money without any issues whatsoever over time period specified on contract terms agreed upon between partner parties involved; however there could always be mistakes when filling out forms so make sure everyone checks carefully before signing anything because once signed legally binds them into obligation terms outlined in agreement/contract signed previously signed earlier today at earliest convenience possible between two parties involved.”

Prepare and issue the shareholder stock certificates

Each certificate should be stamped with a corporate seal, signed by both the president and secretary of the corporation (and notarized if applicable), and contain an accurate description of its contents.

After an S-corporation is created, it can be used to conduct business or start up a new business operation

If you’re starting a new business, the S-corporation is ideal because it will allow your profits to pass through to shareholders without being subject to double taxation.

Conclusion

Hopefully, this article has given you some insight into what it takes to form an S-corporation. While it’s not the most complex business structure out there, there are still a few steps that need to be taken before you can get started with your new company.