Open Your FREE E-commerce Store

Additional Resources For Incorporating In The State of
[Corporations Office] [Corporate Statutes] [Other State Filings] [Filing Fees] [Name Availability] [Addresses]

Michigan INCORPORATION RESOURCES

SEE WHAT ONLINE INCORPORATION SERVICES CHARGE

Check Corporate Name

Michigan Corporation and Land Development Bureau

Michigan Statutes Online

Michigan Corporation FAQ

Additional State Filings That You May Need To Make

Michigan Corporate Kit

Michigan Small Business Document Package

OTHER ISSUES

Protecting Your Business Name

Trademark Searches

Fictitious Names

Business Resources

SITE LEGAL INFORMATION

E-Book Licensing Terms

Privacy Policy

Copyright Notice

 

 

E-BOOKS AND DOCUMENT PACKAGES

Available Michigan E-Books

Michigan Corporate Kit E-Book

Michigan Small Business E-Book

Don't Be Mislead By Other Cheap Incorporation Offers

See How Much You Can Save Using Our E-Books

SAVE BIG $$$$$ WITH OUR AUTOMATED E-BOOKS

What Is A Subchapters "S" Corporation?

"S" CORPORATIONS AND "C" CORPORATIONS

Generally people refer to two separate types of corporations, "C" corporations and "S" corporations. In reality, they are both the same type of entity under state laws governing corporate formation. Every "S" corporation starts out being a "C" corporation. To become and "S" corporation, a "C" corporation files an election with the Internal Revenue Service to be treated differently under tax laws.

HOW IS THE ELECTION MADE

A Subchapter "S" election is made by filing a properly completed IRS From 2553 with the Internal Revenue Service. It is important that this election be made within the right time frame and that the election be properly completed. This is one area of forming your corporation where it pays to consult with your accountant.

Get IRS Form SS-4

Get IRS From 2553

 

BEWARE OF TIME LIMITS FOR MAKING ELECTION

There are time limits after formation when an election must be made with the IRS in order to receive the tax treatment of a Subchapter "S" corporation for the year that the corporation is formed. This decision does not have to be made immediately upon formation, but it cannot be delayed for too long if you want the immediate tax year advantages of Subchapter "S' Status.

CONSULT WITH YOUR ACCOUNTANT

Generally for true small businesses, Subchapter "S" status will be advantageous. However, the final decision should not be made without consulting with you accountant.

WHAT IS THE PURPOSE FOR MAKING A SUBCHAPTER "S" ELECTION

If you file for Subchapter "S" status, you are electing to treat the corporation as a"pass-through" entity for income tax purposes. All of the implications of making this election are beyond the scope of this guide. However, generally speaking, if you make the election all of the profits and losses of the corporation will be passed onto the individual tax returns of the shareholders in proportion to their shareholdings. Generally speaking, the corporation will not be treated as a taxable entity.

WHY CAN THIS BE AN ADVANTAGE

Again, speaking very generally, the reason this election is normally made is to avoid being taxed twice for the income of the corporation. Where the election is not made, the corporation will be a taxable entity and will pay tax on it's net income at corporate income tax rates. When distributions are made to shareholders out of the net earnings, those shareholders will pay income tax again...thus resulting in taxation at both the corporate and individual levels. Although there are other ways of mitigating this tax effect which you should discuss with your accountant, making a Subchapter "S" election is the most common method used by most small businesses.

 

Some of the documents in this package are available only in Adobe PDF format. You must have Adobe Reader downloaded and installed to use these forms. This is primarily the case with forms where the state proscribes and requires that you use a pre-printed form that the state has created.

CLICK HERE if you do not have Adobe Reader.

GUIDE TO MAINTAINING YOUR CORPORATION

Overview

Regular Meetings and Corporate Actions

Separate Corporate Accounts

Annual Reports and Filings

Contracting

Advertising and Marketing

Director Duties

 

ADDITIONAL DOCUMENTS Provided Totally Free Of Charge

IRS Form SS-4 To Obtain Federal Tax ID Number

IRS Form 2553 To Make Subchapter "S" Election

State Forms