How to Register an S Corporation

Introduction

An S corporation is a business that’s set up as a corporate entity but taxed like a partnership or sole proprietorship. The structure of an S corporation has many benefits and is especially popular with small businesses. It has fewer regulatory requirements than other corporate structures, so you’ll be able to get your company up and running more quickly. In this guide, we’ll take you through the steps involved in registering an S-Corporation so that you can get started on your new venture!

Choose an available name for your business that meets your state’s requirements.

Choose a business name that meets your state’s requirements, which may include:

• A length between three and 50 characters.
• No special characters, such as ampersands ( & ), hyphens (-), or periods (.).
• Using words that have no meaning when taken out of context. For example, “The Great Company” would be acceptable because it describes the company’s products and services as great; however, “Service Express” would not be allowed because this phrase does not describe anything about the company’s products or services.

File your articles of incorporation or corporation certificate

• File your articles of incorporation or corporation certificate with the secretary of state.
• The filing fee will usually be between $50 and $200.
• The articles of incorporation must include the name, purpose, and duration of the corporation.
• You’ll also need to have all shareholders, directors, and officers sign it (by hand).

Publish a statement of incorporation

The Statement of Incorporation is a legal document that establishes your business as an S corporation. The Secretary of State publishes the statement and makes it a public record, accessible to the state and to anyone else who requests it. This is important because there are tax implications associated with this status—it affects how you file your taxes, among many other things.

Appoint a registered agent

After you’ve filed your Articles of Incorporation with the Secretary of State, the next step is to appoint a registered agent. This person or business must be a resident of the state in which you are creating your corporation and must have a physical street address. The registered agent is responsible for receiving legal notices and other important documents on behalf of your company.

Approve corporate bylaws

The bylaws are the rules that govern the conduct of an S corporation. These rules should be approved before the corporation is formed and should be reviewed annually and amended as needed. While bylaws are not required by law, they are strongly recommended to help ensure the smooth operation of your company.

Establish tax year and shareholder agreement

You must file a corporate tax return and establish an S corporation’s tax year. The corporation’s tax year is the calendar year unless you choose to adopt a fiscal year for your business.

For example, if you register your S corporation in January 2020, its first taxable period will be from January 1 through December 31 of that year. You can change your accounting period by filing IRS Form 1128 at any time during the first four months of the following year (in this case, April 15).

You also need to create a shareholder agreement between yourself and other owners who will own shares in your company. This contract establishes ownership rights and management duties for each shareholder—and it can be amended at any time by mutual consent between all parties involved in running the corporation.

Obtain an employer identification number (EIN)

To obtain an EIN for your business, visit the IRS website and click on the Employer identification number application. You’ll need to fill out the online form and provide some personal information about yourself and your business. After you submit this application, it will take about 7-10 days for you to receive an EIN by mail. Once you have your EIN, keep it in a safe place because it will be used throughout the life of your S corporation as proof that it is registered with the IRS and eligible for special tax treatment under federal law.

Apply for licensing and permits

• Apply for a business license. Your city or county will require you to apply for a business license and pay the applicable fees.
• Apply for a sales tax permit if necessary. Most states require businesses with more than $10,000 in annual gross receipts to register with their state’s department of revenue and obtain an exemption certificate before they can purchase goods without paying sales tax on those items (called “use tax”). If this is required in your state, you’ll need to apply for an exemption certificate from your state revenue department before you can register as an S corporation. Only those stores that have employees must charge sales tax on their products; if you run a one-person operation from home or out of the garage behind your house, there won’t be any sales tax collected at all. All other states allow S corporations to operate without collecting any type of taxes whatsoever.
• Apply for relevant business licenses and permits within fifteen days after incorporation.

Open a bank account for the S corporation

• Open a business checking account.
• Use a reputable bank.
• Make sure the bank is FDIC-insured.
• Make sure the bank is a member of the Federal Reserve System, meaning it is part of the national banking system and subject to federal oversight. It should also have at least one branch in your state, even if you don’t live in that city or state yourself. You want to be able to pay bills online and deposit checks without incurring hefty fees from other banks that may not be as easily accessible or convenient for you—or your new business customers!

Follow these steps to register an S-Corporation

• File articles of incorporation with the state. You’ll need to file these in person at the secretary of state’s office, where you will also submit form SS-4 (Application for Employer Identification Number). The filing fee is usually $75-$125.
• Publish a statement in an official newspaper within your county or city announcing your formation as an S corporation. At least one shareholder must sign this statement. You may also want to include contact information for your registered agent and corporate officers, as well as a description of what type of business you do (for example, “Sole Proprietorship”).
• Appoint a registered agent for the service of process if required by state law (check with your Secretary of State’s office or local government entity). Your registered agent should be someone who lives in the same state where you formed your company, who can maintain records and open mail on behalf of your company during normal business hours Monday through Friday—this person doesn’t have to be involved in running the company at all!

Conclusion

Forming a limited liability company is an essential first step in protecting your personal assets and establishing yourself as an entrepreneur. You’ll need to check with your state’s Secretary of State or local government office to find out what requirements are necessary for setting up an LLC in your area, but the process is relatively simple and straightforward.