Do-it-yourself Michigan S Corporation Kit
While turning your business into an S corporation can be extremely beneficial, let's face it: It can be discouraging to pay some accountant or attorney hundreds or thousands of dollars for the set up. But here's a secret many veteran entrepreneurs know. You can do the work of turning your business into an S Corporation yourself. All you need to do is fill out a three, relatively simple forms.
What's more, you don't have to struggle with the forms yourself, you can work from the instructions provided in one of my affordable, instantly downloadable Michigan S corporation kits.
But before I describe how to purchase and download a kit, let me give you a birds-eye view about how the process works so you can decide for yourself whether a do-it-yourself S corporation is even practical in your situation....
Three Forms to Fill Out
As mentioned, to form an S corporation in Michigan, you need to fill out three forms: either articles of formation or articles of incorporation to create the LLC or corporation that you'll use for the S corporation, an employer identification number form to alert the IRS to the new LLCs or corporation's existence, and then the election statement to document that all of the LLC's members or all of the corporation's shareholders are okay with the S corporation tax accounting rules.
One Quick Clarification
You should know that you don't actually need to be a corporation to be an S corporation. An S corporation is an eligible entity that makes an election to use the tax laws found in Subchapter S of the tax code. Most often, an eligible entity is a corporation or a limited liability company. You can accordingly use either of these platforms to make the election to be treated as an S corporation.
Because a business owner has two options for making the S corporation election, I've created and will give away as downloadable zip files two do-it-yourself kits to guide a Michigan business owner through the process for setting up a Subchapter S corporation.
Michigan S Corporation Kit (with LLC as platform)
The LLC version of my do-it-yourself kit gives step-by-step instructions on how to create an S corporation using a limited liability company as the platform. Personally, I prefer using an LLC. It's less complicated and messy, and in Michigan (as in most states) it's a tad cheaper to form an LLC than it is to form a traditional corporation. As a bonus, I include two sample operating agreements for your business: one for single-member LLCs and one for multiple member LLCs.Purchase and Download
Michigan S Corporation Kit (with corporation as platform)
The other option you have as a business owner is to use a traditional corporation as the platform for your S corporation. Although I prefer using an LLC in most circumstances, situations exist where using a traditional corporation can be the right choice. If it's really important to have "Inc." or "Corporation" in the name of your business for branding or credibility, for example, using a traditional corporation may be the appropriate choice.
The traditional corporation version of the Michigan S Corporation kit also discusses the benefits and drawbacks of forming a corporation in Michigan, and it also gives detailed instructions for incorporating your business and making the election to be treated as an S corporation. I include a set of corporate bylaws that can be used by you or your attorney as a starting point for drafting up a set of customized bylaws for your corporation.Purchase and Download
Additional Information You May Find Useful
If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.
Often the best tax saving tool private companies have? The Section 199A deduction which allows them to avoid taxes on the last 20 percent of their income.Read More
Using an S corporation for your business? To maximize savings, you need to minimize the salary paid to shareholders. But this decision is tricky.Read More
Nearly secret, the federal government's employee retention credits provide tremendous payroll tax savings for most small businesses... A new book from our firm explains.Info here