How to form an S-corporation for Meat


We strongly recommend that you consider forming your business in an S Corporation. S Corporations have many of the benefits of a traditional C corporation, but with fewer drawbacks.

The S Corporation is a popular entity option for small businesses

This structure combines many of the benefits of the sole proprietorship and the C Corporation, with few of the drawbacks.

S Corporations have a number of advantages over other business structures. S Corps can be a good choice for an individual or group that wants to limit personal liability but still have their income taxed at the individual level instead of being taxed twice as it is under a C Corporation structure.

The following are some key advantages to forming an S Corporation:

  • Pass Through Taxation – Income from an S Corp passes through to its shareholders who report it on their personal tax returns and pay taxes at their individual tax bracket rate. The corporation itself does not pay any federal tax on its profits (though some states do charge an entity-level tax).*
  • Flexibility in Management and Participation – A shareholder can work full time at another job and still participate in management decisions.*
  • Shareholder Liability Protection – Shareholders are not personally liable for acts committed by others within the scope of employment.* Easy Transferability – You may transfer your shares without going through any formal process as long as you transfer them to someone who meets certain requirements.

Advantages by forming your company as an S corporation include

Pass-through taxation

One of the primary benefits of an S corporation is that its income is taxed at the individual level. Income from a regular corporation is taxed twice: once at the corporate level and again when it’s distributed to shareholders as dividends. Because S corporations only pay taxes on items like salaries and fringe benefits, they don’t have to pay taxes on their profits—they just pass them along to their shareholders who then pay their own personal income tax rates on those profits (minus any capital gains). This process is called “pass-through taxation,” as opposed to double taxation.

Pass through taxation means that you don’t have to worry about paying corporate income tax on your meat business’ profits because there isn’t one—you simply get all of them yourself for your own personal use rather than having some portion go toward paying off creditors or funding company operations. You’ll still need to file a Schedule C form with your personal federal taxes each year (even if all you do is convert from being an LLC or sole proprietor) but beyond this, there aren’t any additional government fees involved in running an S corp meat business!

Flexibility in management and participation

S-corporation shareholders can participate in management and make decisions regarding the affairs of the corporation. Shareholders may be individuals or other entities, named or unnamed, active or passive. The flexibility of this structure allows for business owners to have some control over their company while maintaining limited liability protection.

Shareholder liability protection

The shareholders of an S-corporation are not liable for the debts and liabilities of the corporation. However, shareholder liability protection does not extend to directors or officers. You should consult your attorney regarding this matter prior to incorporation.

Shareholders are also not liable if they personally guarantee any loans taken out by their corporation, according to the IRS website.

Perpetual existence–the corporation doesn’t end when a shareholder dies or leaves

One of the main reasons many small business owners choose to incorporate is so their company will continue to exist even after they die or leave.

In an S-corporation, this is true even when a shareholder dies or leaves the business: The corporation continues to exist independently of its shareholders. The shareholders don’t have to sell the business; they can continue operating it as an S-corporation even after one of them dies or leaves.

While an S corporation is easier to set up and operate than a C corporation, it still tends to be more cumbersome than an LLC. For this reason, most states do not require an annual meeting like they do for C corporations

An S corporation can be a good choice for some businesses that want the limited liability of an LLC but want the tax benefits of being treated as if they were a partnership or sole proprietorship under the terms of the Internal Revenue Code.


If your business is close to its break-even point, it may be a good idea to form as an S corporation instead of an LLC or C Corporation. This will allow you to minimize taxes while still having limited liability protection.

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