{"id":134,"date":"2016-01-29T19:21:33","date_gmt":"2016-01-29T19:21:33","guid":{"rendered":"http:\/\/www.marcusboxerman.com\/FAQ\/?p=134"},"modified":"2020-03-16T18:44:06","modified_gmt":"2020-03-16T18:44:06","slug":"what-are-the-benefits-of-an-s-corp","status":"publish","type":"post","link":"https:\/\/marcusboxerman.com\/faq\/what-are-the-benefits-of-an-s-corp\/","title":{"rendered":"What are the benefits of an S corp.?"},"content":{"rendered":"<p>When business owners choose an S corp., it\u2019s for the tax benefits.\u00a0 S corps. are more rigid and require more paperwork than LLCs, but they pay significantly less in employment taxes, which makes a big difference for highly profitable businesses.\u00a0 S corps. are beneficial because they:<\/p>\n<ul>\n<li>Only pay employment tax for employee wages, not their entire net income;<\/li>\n<li>Can write off certain employee\/shareholder benefits for more savings;<\/li>\n<li>Exist in perpetuity, making it easier to continue operating if a shareholders dies, sells his or her shares, or leaves the corporation;<\/li>\n<li>Have clearer lines between the business entity and its shareholders;<\/li>\n<li>Seem more legitimate to investors, who view the corporate structure as more stable; and<\/li>\n<li>The paperwork resulting from required corporate formalities serves as great evidence of prudent business decisions in the event of a lawsuit<\/li>\n<\/ul>\n<p>The downsides to S corps. are the restrictions, which include limitations on membership, investments, and types of stock.\u00a0 S corps. must be managed by a board of directors, not the shareholders, and are required to observe corporate formalities.\u00a0 If an S corp. fails to meet all of its entity requirements, it converts to a C corp. and loses its tax benefits.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When business owners choose an S corp., it\u2019s for the tax benefits.\u00a0 S corps. are more rigid and require more paperwork than LLCs, but they pay significantly less in employment taxes, which makes a big difference for highly profitable businesses.\u00a0 &hellip; <a href=\"https:\/\/marcusboxerman.com\/faq\/what-are-the-benefits-of-an-s-corp\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[50,51],"class_list":["post-134","post","type-post","status-publish","format-standard","hentry","category-business-and-corporate","tag-s-corp-benefits","tag-tax-benefits"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What are the benefits of an S corp.? 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