S Corporation Attorneys
We provide knowledgeable legal advice and assistance to companies
Deciding what corporate structure is right for your business can be difficult decision. The business formation you chose for your company can have far reaching implications. That’s why it’s important to carefully consider all your legal options.
One of the business structures companies choose is an S corporation. There are many advantages and disadvantages to forming an S corporation. That’s why it’s critical to consult with an experienced attorney familiar with different types of corporations and which one best suits your business model.
Our legal team at Eller Tonnsen Bach, LLC guide you through the process and help you decide if an S corporation is right for your company. We have extensive experience working with businesses throughout South Carolina and North Carolina. As a result, we’re familiar with the rules and regulations governing companies, as well how the legal system works when it comes to corporate law and business litigation. We’re the law firm you want when it matters most.
What is an S corporation?
Sometimes referred to as a “closely held corporation,” an S corporation combines different aspects of corporations and business partnership agreements. The S refers to small since many S corporations are smaller businesses.
Unlike some corporations, only a limited number of shareholders (up to 100 people) can be investors in an S corporation. All of the shareholders must also be U.S. citizens or residents of the United States.
Investors and shareholders of an S corporation also do not receive stock dividends from the company. In addition, there is only one class of stock issued for S corporations. There are many other unique features to S corporations. That’s why it’s important to consult with an attorney familiar with these types of companies in the state where the business is located.
What are the tax implications of an S corporation?
Perhaps the biggest difference between S corporations and other types of companies has to do with how taxes are assessed and collected for such companies. In the case of an S corporation:
- The company itself does not pay any taxes.
- Taxes are only filed once a year instead of quarterly like most corporations.
- All taxes owed by the company are paid by shareholders.
- The shareholders pay taxes at the individual tax rate, not the corporate tax rate.
Such tax advantages make S corporations attractive to many business owners. However, it’s important to understand that S corporations often come under more intense scrutiny from the Internal Revenue Service (IRS). That’s why it’s important to fully understand the tax implications involving S corporations before incorporating a company in this manner.
What legal issues often affect S corporations?
Many legal issues often come up involving S corporations, including:
- Incorporation process can be complicated, cumbersome and confusing.
- Being audited by the IRS.
- Verifying that all investors meet the necessary legal requirements.
- Lawsuits or other legal action taken against the company.
- Shareholder disputes.
Whatever legal issues comes up, it’s important for companies to take such matters seriously right from the start. In many cases, there may even be strict deadlines (known as statute of limitations) or penalties for failing to respond to such issues in a timely manner. An attorney familiar with this area of the law can advise you on the best way to proceed in order to effectively address such legal issues.
Discover what we can do for you. Contact our law firm
We understand the seriousness and the urgency of many legal issues involving S corporations. That’s why you can count on us to get straight to work researching your case. We’re familiar with the applicable state and federal laws that apply to S corporations in South Carolina and North Carolina. As your attorney, we can explain the available legal options and recommend which approach makes the most sense for your specific circumstances.
We’re also aware of the financial pressures often facing many S corporations. That’s why we strive to find cost-effective solutions that produce measurable results. We will never bill you for any unnecessary legal fees. We respect your time and your money.
Learn more about how we can help you. Contact our law firm and schedule an appointment. An attorney at one of our three office locations in South Carolina and North Carolina can analyze the legal challenges facing your company and work with you to resolve them.