How to form an S-corporation for Chemicals

Introduction

A corporation is a legal entity created by state law that protects the owner from personal liability. The owners of corporations are called shareholders and they can be individuals, other corporations, or the estates of deceased persons. A corporation has a distinct legal personality and can own property in its own name; it can sue and be sued in its own name; and it may have employees. Corporations may be formed for business or nonbusiness purposes, but not for charitable, religious or political purposes.

You choose a name for your S-Corp

Your S-Corporation must have a name that is unique. The IRS will not allow you to use any of the following in your business name:

• Your own personal name, such as Joe Smith.
• A trade or fictitious name, such as Watson & Company.
• An abbreviation of a company’s real name, such as J & W for John & Wendy’s Ice Cream Shop.
• The word “corporation” or “company.” For example, if you are forming an S-Corp called Green and Clean Lawn Care—Green and Clean LLC sounds good to us! You can always put in your own twist on it like Green & Clean Landscaping or Green & Clean Lawn Care Incorporated (which we would recommend doing for legal reasons).

You choose a registered agent

When you form your S-corporation, you must choose a registered agent for the corporation. A registered agent is a person or business that serves as the S-Corp’s contact for legal and tax purposes. Registered agents are required to be located in the state where they serve. Your state will provide you with a list of registered agents within its borders, such as this one from Delaware:

If one of these companies is willing to serve as your company’s registered agent, all you have to do is fill out their online application and pay them a fee.

 Compile annual reports

• You file an annual report with the secretary of state. Your business must file a report with the secretary of state on or before the 15th day of the 4th month after the close of your fiscal year. The form is called an annual report, and it costs $25.
• You have to maintain records for at least 7 years. The IRS requires that you keep all financial records in your business for at least 7 years from when they were created, unless they’re prepared under a specific provision that allows them to be destroyed sooner (like some payroll records).

You get an EIN (Employer Identification Number)

You need to obtain an Employer Identification Number (EIN) for your business. You can do this online at the IRS website, or you can call them. If you have employees, you need to have an EIN to file taxes and other forms with the government. If you have employees, each person who owns more than 2% of your corporation must also have a Social Security Number so that you can pay them income tax as well.

Your S-Corp elects to be taxed like an S-Corp

One of the biggest advantages of S-Corp status is its flexibility. You can elect to be taxed like an S-Corp, but also like a C-Corp or LLC.

To do this, you’ll need to file Form 2553 with your federal income tax return each year.

A corporation is a legal entity created by state law that protects the owner from personal liability

The corporation is essentially a separate legal entity from its owners, so if you were to owe money for tax liabilities or damages due to your products, only the assets of the corporation would be at risk.

When forming an S-corporation for chemicals, it’s important to understand that each state has its own rules of operating. An attorney who specializes in forming businesses through S-corporations will know exactly which form needs to be filed with your state government and ensure that everything is done correctly according to those regulations.

Conclusion

A corporation is a legal entity created by state law that protects the owner from personal liability. To form an S-corporation for your chemical business is a good initiative to protect your business from liabilities and other burdens. If you have really decided on to the corporate structure for your business then its time to get in touch with us! We are happy to help.