S corporation is a business entity that has been a question to some sole proprietorships and general partnerships. There are many questions about how will they benefit from it when they incorporate their business. It is said that this is a pass-through business according to Internal Revenue Service or IRS. The business needs to file the Article or Incorporation to the State Secretary of Florida or any government law that has the same position. It is governed by the corporation and issue stock. However, before you decide to be incorporated with S Corp, there are things that you should know. Things about what can you gain and what will be the limitation to your company. Here are some of among them.
- Added credibility. It is known that incorporating your business with S Corp will add credibility to your business. Investors are more at ease to transact business and new companies can gain trust.
- Separation from your personal assets. This is the first aim of the corporation, to separate your personal assets for protection from creditors. If the company has debts and liabilities, creditors are not allowed to touch any personal assets from the shareholder such as house, car and many more. Click here to know more about it.
- Ownership transfer. It is not hard to transfer ownership with this corporation without problems with tax. Owners are not obliged to have adjustments on the property or compile difficult accounting information.
- The flexibility. It does not allocate any income and loss to the shareholders because of the one-class-of-stock restrictions.
- Expenses. There are expenses that the company should pay when forming and the ongoing process of the incorporation. The fees can be carried out by the company yet partnerships and sole proprietorship are still cheaper.
There are more about S corp than what are enumerated above. Get to know more about it.