How to form an S-corporation for Flour

Introduction

S corporations are a popular structure for small businesses. They’re similar to C corporations but with fewer restrictions on shareholders and directors. An S corporation is formed by filing Articles of Incorporation with a secretary of state’s office, which will issue an EIN number as well as a corporate registry number. In addition, you must create bylaws and hold an organizational meeting with your board of directors or investors to finalize matters like how much capital each person contributed and other important decisions that will determine how the business operates long-term.

Can have no more than 100 shareholders

Shareholders must be US residents or citizens, and they must also be natural persons. Each shareholder in an S-corporation must have one vote per share owned. Shareholders may not be minors; however, minors can own shares in a parent’s name if they meet certain requirements and restrictions.

Elect to be treated as an S Corporation with the IRS via Form 2553

This form is available from the IRS website and must be submitted within 75 days of the end of your fiscal year. The form is free, but make sure to keep a copy for your own records because it indicates that you plan on being treated as an S corporation.

Create a board of directors

The board of directors should be elected by shareholders and may consist of one or more members. At least two members must be present to form a quorum for the purpose of conducting business. The board designates one member as its president and CEO who has overall responsibility for management, including preparing a business plan for S-corporation approval.

Draft bylaws that set out the rules you must follow and appoint a secretary and treasurer

These are the rules and regulations that govern your business. You’ll need them to set out how much money you can pay yourself, what percentage of profits can be distributed as dividends and more. As with any legal document, it’s best to have your bylaws drafted by an attorney who specializes in small business law. Your state may have its own standard operating procedure for creating written rules for corporations.

Here are some basic guidelines for creating your own S-corp bylaws:

  • Include the purpose of the corporation as well as its name, address and date of formation.
  • Specify who will serve as directors/officers/managers/trustees or whatever titles they hold within the company.
  • Determine whether any restrictions should apply regarding voting rights or transferability of shares.

Hold an organizational meeting with the board of directors to adopt your bylaws, issue stock and make other important decisions for your business

The board of directors is the governing body of the corporation and has many responsibilities including:

  • Selecting a suitable location for conducting business
  • Setting up a plan for raising capital
  • Approving annual budgets and other financial documents

The board of directors can be made up of one person or several people depending on how large or small your company is.

File Articles of Incorporation with your secretary of state’s office

These articles must be filed within 90 days after the date you are incorporated.

Once you’ve filed these documents, which include the name of your new corporation, type of business it will conduct and its purpose and names and addresses of its incorporators, your business has officially been incorporated as an S corporation!

Obtain an EIN from the IRS

To get an EIN, go to the IRS website here. From there, simply select “Apply for an Employer Identification Number (EIN).” On this page you’ll be prompted with some information about your business:

  • Name of entity (including branch or department name)
  • Address where records are maintained
  • Contact person for employer identification number application

Publish legal notices in newspapers in your area

These are a good way to let people know about your business and its intent to become an S-corp. If you don’t publish the notices, you may not be able to do business in your state. The reason for this requirement is that it ensures that new businesses are publicly acknowledged and legally recognized. In other words, it prevents fly-by-night companies from taking advantage of customers’ trust by pretending they’re real businesses when they’re just one person working out of his garage.

While it’s possible to form your own S corporation, finding an attorney may reduce some of the stress

Attorneys are experts in their field and can help you avoid mistakes that could cause problems down the road. They can also advise you on how to structure your business so that it’s set up correctly in order to reduce your tax burden.

Conclusion

It may seem like a lot to take on, but forming your own S corporation can be a great way to protect your assets and make sure that you’re ready to expand if needed. Plus, the best part is that it’s not just for people who work in IT or finance—anyone can do it! If you have any questions or need more information about how to form an S corporation, don’t hesitate to call our team.

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