Incorporation
Establish an S-Corp.
The US-resident structure that pairs the share-and-board mechanics of a Corporation with the pass-through tax treatment of an LLC. The considered middle ground between the two.
What an S-Corp actually is.
For the US resident who wants the benefits of an LLC alongside those of a C-Corporation, the S-Corp is built precisely for that intersection.
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Who can form one.
The S-Corp has the strictest eligibility of any US business structure.
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Why founders choose this structure.
The S-Corp's appeal is specific: it eliminates the double taxation that hits a C-Corporation, while keeping the share-and-board structure that an LLC doesn't offer.
Discover moreWhat an S-Corp actually is.
For the US resident who wants the benefits of an LLC alongside those of a C-Corporation, the S-Corp is built precisely for that intersection.
An S-Corp is a Corporation managed by a board of directors elected by shareholders. The mechanics of stock, governance, and transferability mirror a C-Corp exactly. What's different is who can own one and how the IRS taxes it.
Shareholders are not personally liable for the company's debts. With limited exceptions, creditors cannot reach personal assets to recover business obligations. The same separation of personal and corporate liability that defines an LLC applies here.
Who can form one.
The S-Corp has the strictest eligibility of any US business structure. Owners must be US citizens or US residents. Foreign nationals cannot hold shares, full stop.
If you meet the residency requirement, the formation requirements are administrative: a valid US-issued ID, license, or passport, and a physical address in the state of incorporation where official notices and correspondence will arrive.
- US citizenship or US residency, mandatory for all shareholders.
- A valid identification document: US-issued ID, driver's license, or passport.
- A physical address in the state of incorporation, where official documents are received.
- Maximum of 100 shareholders, all of whom must individually meet the residency requirement.
Why founders choose this structure.
The S-Corp's appeal is specific: it eliminates the double taxation that hits a C-Corporation, while keeping the share-and-board structure that an LLC doesn't offer.
Profits flow through to shareholders' personal returns instead of being taxed at the corporate level first. For a US resident with steady distributions, that single change can make a meaningful difference in effective tax rate.
- No double taxation: profits flow through to shareholders' personal returns rather than being taxed at the corporate level first.
- Easy ownership transfer: shares can change hands without significant tax consequences or restructuring.
- Pass-through tax treatment, similar to an LLC, with personal income tax filed individually.
- Personal asset protection: the same liability separation that defines a Corporation applies here.
Details
What's included in your S-Corp formation
- IDs and documents review
- Preliminary verification of corporate name
- State registration filing
- Articles of Incorporation (filing and copy)
- Certificate of Status
- BOI reporting
Questions
Frequently asked
How is an S-Corp managed?
An S-Corp is managed by shares, the same way a C-Corporation is. The board of directors makes corporate decisions; shareholders vote on major matters. The S-Corp can issue and trade shares; what changes from a C-Corp is who can hold them and how they're taxed.
How are S-Corps taxed?
S-Corps use pass-through taxation, similar to an LLC. The company itself doesn't pay corporate income tax. Instead, profits and losses pass to the shareholders, who report them on their personal returns based on ownership percentage. Federal rates run from 10% to 37% depending on individual income.
What's the maximum number of shareholders?
An S-Corp can have up to 100 shareholders. That cap is why the structure works for closely-held companies but not for those planning a public offering.
Who can own an S-Corp?
Owners must be US citizens or US residents. The S-Corp is the one US business structure with a strict residency requirement on shareholders.
Can a foreigner form an S-Corp?
No. An S-Corp cannot be owned by foreign nationals. If you're a non-resident founder, the C-Corporation or LLC is your route. We can walk you through which one fits your business.
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