How to form an S-corporation for Paper Goods

Introduction

If you want to form a paper goods company and take advantage of the tax savings that come with an S corporation, then you need to know how it works. The S-corporation is a type of business entity that allows for pass-through taxation, which means that it doesn’t pay taxes on its earnings but instead passes them through to its owners in the form of dividends. You can also save money by forming your company as an S-corp if you are able to qualify for such status.

The S-corporation is a type of business entity that allows for pass-through taxation

The tax burden is passed on to the shareholders, who then pay individual taxes on their personal returns. When you earn income through an S corporation, you’re taxed as if you were self-employed—the profits are attributed to your individual return and subject to self-employment tax.

The S-corporation is formed in the same way as a regular corporation

The S-corporation is a type of corporation in which the shareholders own the business, and the business itself pays no corporate income tax. Instead, it passes on its profits or losses to its shareholders according to their ownership interest.

The main benefit of an S-corporation is that it offers pass-through tax treatment: If the corporation makes a profit, that profit is passed onto you as a shareholder who receives a distribution; if the corporation incurs a loss, so do you as one who receives less than they were paid out by way of distributions during that year.

The S corporation formation process will differ slightly from state to state

The S corporation formation process will differ slightly from state to state. If you want to start an S corporation, the best way to find out what you need to do is talk to your attorney or accountant. The process is not always the same even within a single state and it will be different depending on whether you’re forming an LLC or corporation.

If you want to form an S corporation, you will need to observe the following requirements

There are several requirements that must be met before you can form an S corporation.

• The corporation must have more than one shareholder.
• There must be a board of directors. This is a group of people who manage the business and make decisions about it on behalf of the stockholders.
• A stockholder meeting must be held at least once every calendar year (and not less often than annually), where shareholders vote on important matters such as electing new directors and approving important financial transactions like borrowing money using bonds or other types of debt instruments issued through banks or credit unions.

In order to take advantage of the benefits of forming an S corporation, you must adhere to certain requirements throughout the term of business

The following is a list of requirements that must be met:

• You can only have 100 shareholders. It may seem like a lot at first, but don’t worry—the board will make sure to cap the number at this amount.
• Non-family members must own 75% or more of shares. This ensures that your employees are invested in the success and growth of your company through their shares in it.
• You must be a domestic corporation (that is, one incorporated under U.S. law). If you’re not located within the U.S., don’t worry! There’s still hope for you! Simply register as an offshore limited liability company (LLC) and then form an LLC-to-S corporation conversion with us here at Paper Goods Incorporation Services; we’ll handle everything for you! Don’t forget: if there’s anything else we can do for you today, please let us know by filling out this short questionnaire .

You can save a lot on taxes if you form your paper goods company as an S-corporation

The S corporation tax rate is 20%, compared to 35% for regular corporations and 39.6% for C corporations. However, that’s not the only reason why forming your paper goods company as an S-corporation is beneficial:

• Partnerships—for example, general partnerships or limited liability companies (LLCs)—are taxed at the owner’s personal rates instead of corporate rates. This means your business will be taxed at the same rate as you are individually if it’s classified as a partnership. For example, if you’re in the 33% tax bracket and so is your business partner, then both of you will pay 33% income tax on any profits to which other people would otherwise be entitled based on their ownership stake in your business.
• Partnerships can also elect to file Form 1065 rather than 1120S (the form used by most small businesses). This saves time because there aren’t any additional forms required when filing this way—all information that would otherwise have been provided on Form 1120S gets included with Form 1065 instead!

Conclusion

While forming an S corporation may seem like a difficult process, it’s actually pretty straightforward. Once you know what you need to do and have all of your paperwork in order, the rest is just a matter of filing forms with the state and getting approval from IRS.