How to form an S-corporation for Hospitality


If you are starting a business and want to reduce your liability, taxes, and paperwork, an S-corporation may be the right choice. Forming an S-corporation takes a bit more work than other business types, but it is worth it if you want to limit your personal liability in the event of future lawsuits or other issues. You’ll need to take the following steps:

1. Decide whether S-Corp Tax Status is a good fit for you

  • An s-corp tax status is a great option if you want to take on the risks and benefits of a pass-through entity. Unlike C-corps, which are taxed at the corporate level and then dividends are distributed to shareholders, an S-corp is taxed only once: owners pay taxes on their share of profits (or losses). This means that you’ll have fewer restrictions on ownership structure or how much money you can make each year than if you had chosen a partnership or LLC. You also won’t have any double taxation issues because there aren’t separate entities—your business is just one entity with one set of books and records.
  • A few drawbacks: The biggest drawback with an S-corp is that it’s not quite as flexible as other types of businesses. For example, there are limitations on who can own shares in an LLP or LP so that they don’t become too big; however, this doesn’t apply with an S Corp because everyone owns shares equally so they can grow larger than what would be considered normal for any other type of company structure.

2. Choose a business name

The first thing to consider when choosing your company name is whether it is available as an S-corporation, which means that the final part of your chosen business name must be unique and not similar in sound or appearance to any other company names already listed on the UCC database.

The second thing to consider when choosing your company name is that it should be easy for people who hear it or see it for the first time (in advertising materials) to remember. This can be difficult because many things are incorporated into a person’s memory through repetition, but if possible try not to use too many words in your business name (three or four words max).

3. Register your business with your state government

After filing your business with the IRS and getting your EIN, it’s time to register your S-corporation at the state level. Some states require you to file by mail, while others let you do it online. You can also register your business name at this time if you haven’t done so already.

Registering online is simple and fast: just follow the instructions provided by each state for registering an LLC or corporation. Make sure that you have all of the required information in place before beginning—this includes payment information, an application fee (if any), and any filing fees associated with your particular state’s filing process.

4. Apply for an Employee Identification Number (EIN) from the IRS

You’ll need to provide your company’s name, address, and contact information. If you’re forming a corporation in a state other than where you live, it’s also possible that you’ll have to pay an extra fee if only one location is involved.

5. Open a Business Bank Account

There are many benefits to having a business bank account. For example, you can keep your personal and business funds separate from one another. This helps ensure that you don’t accidentally spend money from your personal account on rent or supplies for the hotel—and vice versa.

Additionally, if you have employees who will be working at the hotel, they may need access to certain bank accounts in order to do their jobs properly and receive their paychecks regularly. If this is the case, then it’s important that those employees have access only to their own accounts; otherwise, it could lead them into trouble with the IRS if they were found out later on down the road!

6. Set up bookkeeping, accounting, and recordkeeping systems

You must record all income and expenses in order to calculate your corporation’s net income. The costs of doing business are deductible expenses and must be reported on Form 1120S, Supplemental Income, and Loss. To figure out what is deductible and what isn’t, you need good records of your financial transactions.

7. Take care of local/state licensing requirements

Once you’ve established an S-Corporation, there are several other steps you need to take before opening your doors:

  • Get a business license. You’ll need one from your city or county clerk before you open for business. The process varies by location and type of business, but it generally involves filling out some paperwork and paying a fee.
  • Apply for a sales tax license. Unless you plan on selling goods without charging customers sales tax, this is something else that will have to be handled with the appropriate local authority. How easy of a process this depends on where you live—and what kind of taxes are involved—but as long as everything goes smoothly here, it shouldn’t be too much trouble at all!
  • Get yourself set up with liquor licenses if applicable; these vary based on local laws but typically require filling out application forms and paying fees or fines associated with obtaining them.


This article has provided you with the information needed to form an S-corporation as a hospitality business. Now it’s up to you to take action.

If this was helpful, please share this article so that more people can benefit from it!


Congratulations! You’re now ready to register your S-corporation and begin operating as a small business owner. Now that you have all the tools you need to get started, it’s time to start planning and executing your hospitality business. First things first though: make sure that being an S-Corp is right for you before jumping in feet first.

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