Tell me about S corporations and C corporations? What are the advantages to S corporations?
 
The most common corporation is known as a "C" corporation or general corporation. A C corporation may have an unlimited number of stockholders. A C Corporation is usually selected by companies than plan to have over 30 stockholders or large public stock offerings. C corporations face "double tax" as they are required to pay income tax on taxable income generated by the corporation and the shareholders pay tax again on distribution of dividends.
 
S corporations are standard business corporations that has elected a special tax status with the IRS. Electing Subchapter S Corporation (S Corp) status is a way to avoid having your corporation treated as a separately taxable entity, rather than having the "double taxation" of a C Corp. The S corporation benefits of this tax treatment is that the corporation is allowed not to be a separately taxable entity. Instead, the income of the S corporation is treated like the income of a partnership or sole proprietorship; the income is "passed-through" to the shareholders who report the income or loss generated by the S corporation on their individual tax returns. An S corporation is formed by electing Subchapter S corporation status with the IRS. This election is done by preparing and filing federal Form 2553 with the IRS. To be classified as an S corporation, a corporation must make a timely filing of Form 2553 to the IRS. In order to qualify for S corporation status, there must be: 1) less than 75 shareholders, 2) the shareholders must be individuals, estates or certain qualified trusts, who consent in writing to the S corporation election, (3) the shareholders can not be non-resident aliens, and (4) an S corporation can't issue preferred shares of stock with special liquidation, dividend or conversion rights. If you meet these criteria and want to elect Subchapter S corporation status, you can have ALLCORP FILINGS, L.L.C. prepare the Form 2553 for you.