When you incorporate, you must choose either “C” or “S” status. Depending on which form you choose, there are differences in corporate governance rules. It’s important for business owners to understand the requirements for their particular entity type, so they can maintain proper compliance behaviors.
For a number of privately held businesses, an S Corp has features that may make it more attractive than a C Corp. A flurry of 1996 tax law changes increased the income tax appeal of an S corporation. More recently, the American Jobs Creation Act and private letter rulings from the IRS have eased restrictions that apply to S Corps.
If you currently operate an S Corp, you need to stay abreast of changes in the law so you can remain compliant. Bulletproof Veil’s company monitoring and education services are the best way to do this. They intervene in many instances where business owners risk imperiling their S election due to compliance missteps.
If you are currently a C Corp, you may benefit from a BPV review to see if changing to S status would be more advantageous. One benefit could be lower income taxes.
A multitude of factors must be considered when selecting a business entity type. Bulletproof Veil can provide you with the guidance and information you need to make the right choice. Visit www.bulletproofveil.com for more information.
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