S Corporation
A tax election for eligible US businesses that can reduce self-employment tax while keeping pass-through taxation.
Pass-through taxation with a corporate structure
An S corporation is not a separate entity type — it is a tax status. An LLC or a corporation elects S corp treatment by filing Form 2553 with the IRS.
To qualify, the company can have no more than 100 shareholders, only one class of stock, and its shareholders must be US citizens or residents. Non-resident founders usually choose an LLC or C corporation instead.
- Profits pass through to owners' personal returns
- Owner-employees can take a reasonable salary plus distributions
- Shareholders must be US citizens or residents
Why US founders choose S corp status
Possible tax savings
Distributions beyond a reasonable salary are not subject to self-employment tax.
Liability protection
Owners' personal assets stay separate from the business.
Credibility
A corporate structure can help when working with larger clients and partners.
How S corp election works
Form your company
Start with an LLC or corporation in the state that suits you.
Get your EIN
We obtain your Employer Identification Number from the IRS.
File Form 2553
The S corp election is filed with the IRS within the required deadline.
S corporation FAQ
Quick answers about our services, process, pricing and support. Need more help? Our team replies in under 2 minutes on average.
Chat on WhatsAppCan a non-US resident own an S corporation?
No. S corporation shareholders must be US citizens or residents. Non-resident founders usually choose an LLC or a C corporation instead.
Is an LLC a corporation?
No. An LLC is owned by members and is more flexible to run. A corporation is owned by shareholders, issues stock, and has more formal requirements such as a board and annual meetings.
Will you help me get an EIN?
Yes. EIN application assistance is included with all our US business formation packages.
How do you help with compliance?
Our team tracks the regulatory requirements for your company and guides you through required filings, so you avoid penalties and common administrative issues.
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