How to Form an S Corp in Florida

By Michael Keenan

Creating an S corporation is a two-step process. First, the business must incorporate according to the laws of Florida as a regular corporation, commonly known as a C corporation. Then you change the C corporation to an S corporation by making a special tax election with the Internal Revenue Service. Businesses choose to elect S corporation status for income tax purposes.

Creating an S corporation is a two-step process. First, the business must incorporate according to the laws of Florida as a regular corporation, commonly known as a C corporation. Then you change the C corporation to an S corporation by making a special tax election with the Internal Revenue Service. Businesses choose to elect S corporation status for income tax purposes.

S Corporation Taxation

The S corporation election changes how the company is taxed. A C corporation must pay corporate income taxes each year, and when it makes distributions to the individual owners, they must include that amount as dividend income in the year the payment was received. So, effectively, the C corporation income is taxed twice. With an S corporation, the income of the business passes directly to individual shareholders according to their proportionate ownership shares. As a result, the shareholders include their share of the business' income on their personal tax returns even if the company does not make any distributions for the year.

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S Corporation Requirements

Not all C corporations qualify to make the S corporation election. To qualify, your corporation must be a U.S. corporation; have only U.S. residents, U.S. citizens, and qualifying organizations such as non-profits as shareholders; have 100 or fewer shareholders; and have only one class of stock, which may carry different voting rights. Also, the corporation cannot be found ineligible for S status simply because of the type of business it is.

Incorporating In Florida

To incorporate in Florida, you must file articles of incorporation for your business with the Florida Department of State, Division of Corporations. The articles of incorporation must contain your company name, address, corporate purpose, the number of shares the corporation may issue, the name and address of the Florida registered agent and the name and address of the incorporator. The company name must include words that designate a corporation, such as Corp.; Incorporated; Inc.; Company; or Co. You can also enter the names of the first directors and officers of the corporation. File the articles of incorporation by mailing the form with the applicable fee to the Florida Department of State or using an online legal documentation service for assistance.

S Corporation Election

Once you have legally incorporated your business in Florida, it is officially a corporation. Assuming your company meets the S corporation requirements, you can make the S corporation election any time. To make the election, file Form 2553 with the IRS. This form requires basic information about the company, including the name, address, employer identification number, state of incorporation, date of incorporation and the corporation's fiscal year. Every shareholder must sign IRS Form 2553 because you must have unanimous approval to make the S corporation election.

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How to Form an S Corporation in Wisconsin

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Florida S-Corp Laws

An S-Corp is a federal income tax designation that allows individual shareholders, rather than the corporation, to pay income tax. Like many states, Florida recognizes the S-Corp elections that corporations make with the Internal Revenue Service. The S-Corp election is very advantageous for individual shareholders because Florida does not assess an individual income tax. Election as an S-Corp allows the corporation to avoid double taxation because normally shareholders pay income tax on dividends figured on after-tax earnings of the corporation.

How to Form a C-Corporation in the State of Maryland

The Department of Assessments and Taxation keeps track of corporations in Maryland. A C corporation is a standard corporation that is subject to the corporate income tax and provided the protection of limited liability for the shareholders. When you incorporate your company, it is automatically treated as a C corporation until you elect otherwise. To be an incorporator in Maryland, the only requirement is that you have to be at least 18 years old.

Define S Corp

An S corp is not a separate type of corporation. Instead, it is merely an election that a corporation makes that changes its tax treatment under the Internal Revenue Code, Subchapter S. However, not all corporations are eligible to elect S corporation status. Knowing your options for your company can help you save money on your taxes so you can have more money to reinvest in your company.

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