How to form an S-corporation for Electronics


If you’re an electronics entrepreneur, then an S-Corp is probably the best choice for your business. You’ll be able to take advantage of tax benefits such as liability protection, tax savings and flexibility, but even though it has its benefits, setting up an S-corporation can be a little complicated if you’ve never done it before. Here’s what you need to know about forming an S-Corporation

Check with your state to see if you need to reserve a name

If you plan on using a fictitious name (also known as an assumed business name) or trade name, check with your state to see if you need to register it.

Decide who will be the officers and directors of your Corporation

Officers and directors are two of the most important positions in an S-corporation.

The officers are the people who run your Corporation. They can be you, or they may be others that you hire. The directors are responsible for overseeing the corporation’s activities and make sure it stays on track with its mission statement, goals and business plan.

Decide on the number of shares that will be sold

The number of shares you sell will depend on the amount of money you need to raise, as well as how many people you want to be involved in your company. If you are the only person involved, then 100% ownership is possible with only one share sold.

File appropriate paperwork with the State

The process is fairly straightforward. You will have to file the Articles of Incorporation with the state and then file your Bylaws (a document defining how your company will be managed). The next step is to obtain an Employer Identification Number from the IRS. Finally, you can hire employees and begin earning revenue.

Obtain Employer Identification Number from the IRS

You can apply online at and expect a response within 15 days. While navigating through the application process, you’ll be asked to provide:

  • Your social security number or individual taxpayer identification number (ITIN).
  • Proof of U.S citizenship or residency as well as documentation showing that you are operating within the country’s borders.
  • Business name and address

Draft Articles of Incorporation in accordance with state laws

The articles of incorporation are the official legal documents that establish your company. They include the following:

  • Name of your company, which must be different from any other business in existence in your state.
  • Purpose for which your corporation was formed, such as manufacturing and selling electronics products.
  • Names and addresses of all shareholders who own a percentage stake in the business, along with their stock certificates if applicable.

Directors are the people who will oversee your company

They don’t have to be employees of the company, but they do need to reside in the state where the corporation is based. There can be no more than 20 directors per S-corporation. The CEO/president will serve as an ex-officio director without voting rights; however, it’s common for him/her to also be a voting member as well. Once appointed by shareholders at a meeting held at least once a year (usually within 90 days after year end), directors serve up until their successors are elected or appointed by shareholders. You may want them all on hand when you form your business so you can get started right away!

Stock certificates are what prove ownership—each share must have its own certificate with its name printed on it (not only yours). To start issuing these documents and transferring shares between yourself (the owner) and other individuals or corporations who want shares would require legal advice from an attorney specializing in securities law because there are many regulations involved here depending on what kind of business entity you chose above (C corporation vs S corporation vs LLC vs sole proprietorship).

Create a corporate Bylaws document for running your company

Bylaws are a set of rules that govern how your corporation is run. Bylaws should be in writing and approved by the Board of Directors. They are not required by law, but they can be very helpful in protecting the interests of the corporation and its owners. The following are some possible provisions that could be included in your S-corporation’s bylaws:

  • The number of directors on the board and their terms
  • How meetings will be conducted (e.g., time, place)
  • Who can vote at meetings and what type of voting rules apply
  • Whether proxies are allowed or needed

Set up a Board of Directors Meeting

As an S-corporation, you are required to have a board of directors (BOD). The BOD is comprised of individuals who are elected by the shareholders and charged with the responsibility for setting strategic direction and management oversight of your company’s operations. They are not involved in day-to-day operations or decision making; rather, these functions fall under the purview of your officers who report directly to them.

Meet annual requirements for keeping your corporation

Each year, you must hold one annual meeting of shareholders and another meeting for directors or managers. At the annual meeting, you must report on your company’s operations and financial status. You also have to file annual reports with IRS and state officials.

You’ll have to pay taxes on your S-corp’s income at corporate tax rates—but if your business is successful enough, then it might be worth having that higher tax rate so that you can enjoy the benefits of having a corporation: limited liability protection for owners against personal lawsuits.

While there is some work involved, it’s worth it to form an S-Corp if you intend to do business selling electronics online or any other way!

S-corporation is a great way to start a company. It can help protect your personal assets and reduce taxes, as well as the liability for the business.


If you’re looking for a way to streamline your electronic business, an S-Corp might be the perfect solution. Forming an S-Corp allows you to have more control over your profits and help reduce taxes on yourself as well! If this sounds like something that would work for you, then follow these steps before starting any new venture.

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