Do-it-yourself South Carolina S Corporation Kit
S corporations can save South Carolina businesses hundreds or thousands of dollars a year in payroll and income taxes, and they are actually quite easy to set up. You just take three simple steps.
Step 1: Form an Eligible Entity
The eligible entity is the foundation for your S corporation, and in most cases it will be either a limited liability company or a regular corporation. To form a limited liability company, fill out an Article of Organization form. To form a corporation, fill out an Article of Incorporation form. The South Carolina Secretary of State website provides downloadable versions of both forms. Send your completed form and $110 for the filing fee to the Office of the Secretary of State in Columbia.
Step 2: Apply for an EIN
After you establish your LLC or corporation, you can apply for an Employer Identification Number, or EIN. There numbers function like Social Security Numbers for businesses. To apply for your EIN, fill out an SS-4 form and submit it to the Internal Revenue Service. You should receive your EIN a month or so after you submit your application.
Step 3: Make the S Corporation Election
The third and final step will be making the S corporation election. To make this election, fill out a 2553 form and submit it to the Internal Revenue Service Center in Cincinnati, Ohio. This form tells the IRS that you want your business treated using the tax laws found in Subchapter S of the Internal Revenue Code, hence the name "S corporation." Once the IRS receives your election, they will check that you followed correct procedure and that you are eligible to make the election before you receive S corporation status.
If you feel confident in this process, don't hesitate to start forming your S corporation right away. If you would like a more detailed set of instructions and some friendly advice, my affordable, downloadable do-it-yourself kits are just what you need.
I have created two do-it-yourself S corporation kits. One explains how to form an S corporation using an LLC as the foundation, and the other explains how to form an S corporation using a regular corporation as the foundation. In most cases, I recommend using an LLC because they are easier to manage, but corporations do have some of their own unique benefits.
Kit Option 1: Using an LLC
This kit explains the positive and negative effects of forming an LLC in South Carolina, and it gives detailed instructions to guide you through the whole three-step process. For clarity, I included filled-out examples of all the forms you will need. I also added two sets of sample LLC operating agreements for you to use as reference points when creating your own operating agreement. One set is for LLCs with one owner, and the other set is for LLCs with multiple owners.Purchase and Download
Kit Option 2: Using a Corporation
Like the LLC version, the corporation version of my do-it-yourself kit analyzes the benefits and drawbacks of incorporating in South Carolina and how to balance them. It provides clear, easy-to-follow instructions for the entire process. It also includes examples of completed forms for reference. Additionally, I included a set of sample corporate bylaws which may be used by you or your attorney as a resource when creating your own corporate bylaws.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