How to Start an S Corp
Guided Expertise for Starting Your S Corp
You’ve done it – you’ve made the exciting decision to turn your business vision into reality. Now you’re ready to start an S Corp. The process can definitely feel overwhelming with all the legal requirements and paperwork. But that’s exactly why we’re here.
Our team specializes in guiding ambitious entrepreneurs through every step of the incorporation process – handling the complex details so you can stay focused on growing your business.
Many business owners come to us asking about S Corporation benefits, and for good reason. When you establish an S Corp, you’re choosing a business structure that offers significant tax advantages through pass-through taxation, strong personal asset protection, and the professional credibility that comes with being incorporated. Plus, you’ll have the flexibility to bring in investors through stock ownership while maintaining protection from business debts and liabilities.
We’ll walk you through the below steps to set it up, and explain how to manage your business taxes and financials going forward.
Don’t get stuck wondering how to start an S Corp.
Let’s get all the proper documentation in place so you can keep your momentum going. We help new business owners from startup to annual tax filings — and every accounting decision in between.
How to Start an S Corp: The Step-by-Step Process
1. Choose Your Corporation Name
Your business name should be unique (one that no one else has claimed state-wide) and adhere to California state guidelines. The name must include a corporate designator like “Corporation,” “Corp.,” “Incorporated,” or “Inc.” We assist with checking availability and reserving your name through the California Secretary of State.
2. Appoint a Registered Agent
California requires corporations to have a registered agent with a physical California address to handle important documents and legal notices. We can help you identify the best agent for this role.
3. File the Articles of Incorporation
We prepare and submit your Articles of Incorporation to the California Secretary of State. This document establishes your corporation and includes essential details like corporate name, purpose, stock structure, and registered agent information.
4. Appoint Directors and Hold Initial Board Meeting
California law requires corporations to have at least one director. We help you appoint your initial board of directors and organize the first board meeting to adopt bylaws, elect officers, and approve initial corporate resolutions.
5. Create Corporate Bylaws
Bylaws are the internal rules that govern how your corporation operates. We provide tailored support to draft bylaws that outline director and shareholder responsibilities, meeting procedures, and corporate governance structure according to your business’s specific requirements.
6. Issue Stock Certificates
As a corporation, you’ll need to issue stock to your initial shareholders. We help you properly document stock issuance and maintain corporate stock records in compliance with California law.
7. File Form 2553 for S Corp Tax Election
This is the critical step that makes you an S Corp for tax purposes. We prepare and file IRS Form 2553 to elect S Corporation tax treatment. This must be filed within 2 months and 15 days of incorporation or by March 15th of the tax year the election should take effect.
8. Obtain an EIN
We’ll obtain your Employer Identification Number (EIN) from the IRS that you will use for taxes, financial applications and registrations, and governmental communications.
9. Understand California S Corp Tax Requirements
S Corps benefit from pass-through taxation at the federal level, meaning that income is reported on the personal tax returns of the shareholders, not at the corporate level, which helps avoid double taxation. However, California has specific S Corp requirements:
- Annual minimum franchise tax of $800
- Additional 1.5% tax on S Corp net income over $100,000
- Requirement to file California Form 100S annually
Don’t worry – we guide you through these specific tax nuances, so you understand how to manage your tax position effectively.
10. File Statement of Information
California requires corporations to file an initial Statement of Information within 90 days of incorporation and then annually thereafter. This keeps your corporate information current with the state.
11. Secure Necessary Business Licenses and Permits
Depending on your business type and location within California, you may need certain licenses to operate legally in the state. We’ll help you navigate which ones to obtain and where to get them.
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