How to form an S-corporation for Mining


A corporation is an entity that can do business as a separate legal person. It has its own tax bracket, and it offers limited liability for the shareholders. Choosing which type of corporation to form depends on what kind of business you’re starting, how much money you have available, and your personal needs. If you want to start your own mining business but don’t know where to begin, this guide will help.

Most states recognize the S corporation, which is a popular small business form

S corporations are popular because they have tax advantages. They are taxed as pass-through entities, meaning that the profits and losses of the company pass through to its shareholders on their personal income tax returns. This means that you don’t have to pay corporate taxes on your business’s earnings, which saves money if you’re running a small operation like a mining operation.

Additionally, S corporations have fewer restrictions on ownership than other business forms do: more than one person can own shares in an S corporation, so long as each shareholder has equal voting rights.

The S corporation has taxation rules that are similar to the partnership and the LLC

You’ll pay taxes on the income of your corporation at the business entity level, not on your personal tax return. Shareholders are not taxed on this income. Instead, they report their share of the income as part of their personal taxable income and pay taxes accordingly.

In addition to these taxation rules, there are some requirements for S corporations that differ from those of other business entities:

  • Only one class of stock can be issued in an S corporation; it must be common stock (i.e., not preferred)
  • An S corporation cannot have more than 100 shareholders per year

S corporations can limit their shareholders’ liability to the number of their investments

In an S corporation, the shareholders are generally not personally liable for the company’s debts and obligations. This means that if you form your mining business as an S corporation and you make a bad deal with someone, they can’t go after your personal assets to recoup their losses. However, this protection is limited:

  • Shareholders are not protected from their own negligence. If the shareholder of an S corporation caused the company harm through their own negligence (like by driving under the influence), then this would be grounds for another party to sue them personally for damages.
  • Shareholders are also not protected from any fraud committed by a third party on behalf of or at the direction or with the knowledge of any shareholder(s).

Your first choice is whether to form your corporation as an LLC or an S corporation

A limited liability company (LLC) is the best choice for small businesses, and in many cases, it’s a good choice even if you don’t think you’re going to be so small anymore. That’s because of the way that corporations are taxed by the IRS: An LLC doesn’t get taxed at all; instead, its owners pay taxes on their shares of profit on a personal level. By contrast, when you’re operating as an S-corporation no one pays any taxes at all until there’s money left over after everyone else’s salaries have been paid and bills have been paid; then those extra dollars get taxed at corporate rates rather than ordinary income rates.

If your goal is to limit liability for yourself personally while still taking advantage of pass-through taxation (as with an LLC), forming an S corporation can help with that too: While anyone who buys stock in any kind of company has some exposure if things go poorly financially down the road, investors who buy stock in S-corporations aren’t liable for anything beyond what they’ve actually invested—and some states offer protection against lawsuits related to debts incurred by these companies as well!

You should consult a lawyer before forming a corporation

A lawyer can help you with the paperwork, legal and financial aspects of the business, as well as the tax and accounting aspects.

you need support and involvement to get started!

In the mining industry, this can include things like:

  • getting the right equipment and supplies
  • finding a location for your business
  • finding people who are willing to work with you or invest in your business

To start a new mining business, you need a lot of support from others

You will need to find a partner and choose the right accountant. You will also have to find someone who knows the ins and outs of mining, like an engineer or geologist.


If you’re thinking about starting a mining business, keep in mind that it’s not as simple as just walking out the door and doing it. You need to do some research and planning beforehand. If you’re looking for help with this process, our team can provide assistance with setting up your business or forming an LLC or S Corp. Contact us today!

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