At some point in your business journey, you MUST determine which type of entity to form. You may consider a C Corporation or an S Corporation, or even a Limited Liability Company.
I’ve found that most of my clients who are just getting started avoid C Corporations because Uncle Samuel taxes them twice (1x at the corporate level and another time at the shareholder level).
On the flip side, S Corporations (“S Corps”)—corporations taxed under Subchapter S of the Internal Revenue Code—and limited liability companies (“LLCs”) are generally taxed once. This difference is a major key because it could mean millions of dollars in tax savings over the lifecycle of your business.
However, knowing when to transition between an S Corp and an LLC is one of the biggest roadblocks business owners face.
Here are my top tips if you’re considering riding the S Corp train to success:
Following these three tips should help you transition to an S-Corp with ease as your business scales.
Making sure your business is properly organized is a key step toward future success. If you’re ready to set your business up for success, check out our Business Formation course, which covers the basics PLUS tons of bonuses to help you form a beautiful brand.
Every good wish,
Ticora Davis, Esq.
P.S. If you’re not about that DIY life, please contact a business attorney at The Creator’s Law Firm, and we’ll help you get your brand set up the right way.
P.S.S. If you need to hire an awesome accountant and tax pro to hold your hand, here are three of my recommendations: Patrice Berry, Myranda Harper-Penn, and Amelia Thomas.