An S Corporation, also known as a Subchapter S Corporation, is a type of entity that provides a unique blend of benefits for small business owners in Florida. If you’re looking to start a business, an S Corporation may be the perfect choice for you.
An S Corporation is a special type of corporation that gets its name from the section of the tax code that defines it. An S Corporation is taxed like a partnership, meaning that the company itself does not pay taxes on its income, but instead, the profits and losses are passed through to the individual shareholders who report the income on their personal tax returns. This provides for a simpler tax structure and can result in a lower overall tax burden compared to a traditional corporation. Unlike an LLC though an S Corp will need to file its own tax return. However, distributions from an S corp will not be subject to self-employment taxes like an LLC. So if you are only paying wages or salaries in your LLC or S corp there will be no impact. However if a part of your income is distributions or profits then an S Corp will save you from having to pay self-employment taxes that currently run about 15%.
Another key advantage of S Corporations is that they offer the liability protection of a corporation. Shareholders are not personally liable for the debts or obligations of the business, meaning that their personal assets, such as their homes, bank accounts, and personal property, are protected. This is a major benefit for small business owners who want to protect their personal assets while growing their businesses. If you are a single shareholder of an S corp. that would likely be a better choice for you than an LLC, since an LLC in Florida will not provide the owner of a single member LLC with liability protection.
In addition to liability protection and tax benefits, S Corporations offer several other advantages, including the ability to sell shares, raise capital, and attract investors. This makes it easier to grow and expand your business and can provide you with the resources you need to succeed. S Corporations also offer the flexibility to choose your management structure, which can help you streamline decision-making and keep your business moving forward. There are, however, some limitations of who can be a shareholder of an S corp. and how many shareholders an S Corp. can have. However, for most people these limitations are not relevant to them.
At Oppenheim Law, our experienced business attorneys understand the unique challenges that small business owners face in Florida. We are dedicated to providing the legal support you need to succeed, whether you are starting a new business or restructuring an existing one. Our team of experienced attorneys can help you navigate the complexities of S Corporation law and ensure that your business is set up for success.
In conclusion, if you’re a small business owner looking for a type of entity that offers liability protection, tax benefits, and the ability to raise capital and attract investors, an S Corporation may be the right choice for you. With its flexible management structure, lower overall tax burden, and ability to protect your personal assets, an S Corporation can provide you with the benefits you need to grow and succeed.
If you’re ready to start your S Corporation in Florida or have any questions about the process, don’t hesitate to reach out to our team of experienced business attorneys. Contact us at 954-384-6114 or visit our website for more information. We’re here to help you succeed and grow your business.