How to Start a S Corp in Indiana

By Heather Frances J.D.

Choosing a business structure is one of the most important decisions you make when you start a business because different structures provide different tax benefits and protection from personal liability. Corporations can elect to be considered S corporations, providing the liability protection and other benefits of a corporate structure with taxation like a partnership. To form an S corporation, you must first form a standard corporation, called a C corporation, then make a tax election to become an S corp.

Choosing a business structure is one of the most important decisions you make when you start a business because different structures provide different tax benefits and protection from personal liability. Corporations can elect to be considered S corporations, providing the liability protection and other benefits of a corporate structure with taxation like a partnership. To form an S corporation, you must first form a standard corporation, called a C corporation, then make a tax election to become an S corp.

S Corp Requirements

S corporations are taxed once at the shareholder level on each shareholder’s personal tax return instead of being taxed both at the corporate level and also at the shareholder’s personal level. However, not all corporations qualify to become S corporations. For example, your corporation cannot have more than 100 shareholders. Your corporation’s shareholders must be individuals, estates or certain other eligible entities, but they cannot be other corporations. Your corporation must issue only one class of stock, and cannot be a bank, insurance company or other ineligible type of business.

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Forming a C Corp

Before you can elect S corp status, you must form a standard C corp. First, you must pick a name for your corporation that includes an indication of your business’ corporate status such as the word “incorporated” or the abbreviation “inc.” Next, you must file articles of incorporation with the Indiana Secretary of State, including the name of the corporation, the name and address of your business’ registered agent, the number of shares of stock your corporation is authorized to issue, the name and address of the incorporators, the signature of each incorporator and a filing fee. You can file these articles online or by mail. As this formation document is important to establish the nature of your business, the aid of an attorney or online legal document preparation service is helpful.

Operating Your Corporation

Indiana requires your corporation to have at least one director to operate the corporation, but you do not have to name the director in your articles of incorporation. Information about directors, including their quantity and individual obligations, is usually contained within the corporate bylaws. Bylaws are the operating instructions for your business, typically addressing items such as how your corporation elects new directors, when the corporation has shareholder meetings and how stocks are transferred. Though Indiana law does not require you to file your bylaws with the state, corporations keep a copy at their principal place of business.

Tax Registration

If your corporation qualifies to become an S corp, you can elect S corp status by filing Form 2553 with the IRS. You must file this form within 75 days after you file your articles of incorporation with the Indiana Secretary of State, or within 75 days of a new tax year. Under most circumstances, you must also register your corporation with the Indiana Department of Revenue by filing a business tax application. For example, if your corporation has employees, you must pay Indiana withholding tax. If your corporation sells items, you must collect Indiana sales tax.

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How to Form an S Corporation in Wisconsin

References

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How to Register a Georgia Corporation

Corporations offer liability protection for their owners, called shareholders — but only if properly formed under state law. To form a corporation in Georgia, you must register your articles of incorporation with the Georgia Secretary of State. You can obtain a form for your articles of incorporation from the secretary of state’s website or use an online legal documentation service to prepare and file them for you.

How to Incorporate in Indiana

To do business as a corporation in Indiana, a company must register by filing articles of incorporation with the Indiana Secretary of State. One of the main benefits of organizing as a corporation is that the owners' liability is generally limited to the amount invested in the business. The downside to incorporating is that profits are taxed twice – once when the money is earned and the corporation files its annual tax return and a second time when profits are distributed to the owners as dividends.

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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