How to form an S-corporation for Travel and Lodging

Introduction

Starting a business can be an exciting time for entrepreneurs. The thrill of starting something new, the challenge of introducing your concept to the world, and the potential for success (and failure) are all part of this process. But one thing that many start-ups overlook is forming their business entity correctly. This is especially true if your startup will have employees or travel across state lines, as these activities often require special paperwork and strict regulations. Thankfully, there’s no need to worry: here’s what you need to know about forming an S-corporation—the best type of business structure for travel and lodging businesses

Step 1: Choose a name for your business

Pick a name for your business that is unique, easy to remember, and does not infringe on another company’s trademark. The name must be available in your state. You should also check with the local chamber of commerce to see if the name is already taken.

Step 2: File Articles of Incorporation with the Secretary of State’s office

In this step, you will file articles of incorporation with your state’s secretary of state office. This is a simple process that requires you to submit a completed form and pay a fee (typically $100 or less). The state will issue your corporation an official certificate within several days. You can find information about filing in your state online.

Step 3: Get an Employer Identification Number (EIN) from the IRS

The Employer Identification Number (EIN) is a 9-digit number that the IRS assigns to identify your business. It is used to file tax returns and pay taxes, open bank accounts, apply for credit cards, apply for licenses, and more.

Now that you have decided what type of company you want to be and formed an LLC or S-corporation, it’s time to get an EIN from the IRS. You can apply online with Form SS-4 or by phone.

Step 4: Ensure you have the proper insurance coverage

If you’re forming an S-corporation, it’s important to have general liability insurance coverage. General liability insurance covers your company in the event that someone sues it because they were injured while on your premises. For example, if a customer trips over one of your employees in the lobby and breaks their leg, then this type of insurance will cover any expenses associated with that injury.

You may also need additional coverage such as worker’s compensation or travel accident (for example if someone gets hurt during their stay at your hotel). It is wise to check with your state Secretary of State website before buying any additional types of insurance.

Step 5: Open a business bank account and apply for a business credit card

Bank accounts are used to pay employees, taxes, and other expenses. Credit cards are used to pay for travel and lodging on the road.

You’ll want to open an account with a bank that is insured by the FDIC (Federal Deposit Insurance Corp.), which insures up to $250,000 per depositor in case of a financial institution failure. You can use this same bank in which you have your personal checking account or another one that offers great rates on accounts specifically designed for businesses like yours.

Step 6: Apply for permits and licenses that apply to your type of business

These can include:

• Licenses from the municipal, country or state authorities regulate various aspects of the lodging industry, including lodging facilities and restaurant kitchen permits.
• Business licenses from local governments. This may be required if you plan on operating from a home office or using a residential address as part of your business name. For example, if you want to use an address like “123 Anywhere Street” as part of your business name in California, then this is considered “a public representation” that must comply with California law regarding how organizations are registered with local authorities (CCR Section 6060). You will need to register with them first before opening up shop at 123 anywhere Street.

For many startups, an S-corporation is an ideal paperwork to have

As a corporate structure, an S-corporation has no limit on the number of shareholders and is taxed as a partnership. Therefore, it’s perfectly suited for startups with several owners and investors who want to share in ownership but also retain control over their own shares.

S-corporations are especially popular among tech companies because they offer fewer restrictions than C-corporations (which require that all shareholders be U.S. citizens).

Conclusion

We hope this article has given you a better understanding of how to form an S-corporation for travel and lodging. This type of business structure is ideal for many startups, but it’s not for everyone. If you have any questions about the process or would like assistance with your own startup, please contact us today!