{"id":197,"date":"2020-07-23T10:00:31","date_gmt":"2020-07-23T10:00:31","guid":{"rendered":"http:\/\/www.rikardneal.com\/blog\/?p=197"},"modified":"2020-07-28T16:39:02","modified_gmt":"2020-07-28T16:39:02","slug":"protecting-your-companys-s-corporation-election","status":"publish","type":"post","link":"https:\/\/www.rikardneal.com\/blog\/index.php\/2020\/07\/23\/protecting-your-companys-s-corporation-election\/","title":{"rendered":"Protecting Your Company&#8217;s S Corporation Election"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-198 alignleft\" src=\"http:\/\/www.rikardneal.com\/blog\/wp-content\/uploads\/2020\/07\/ThinkstockPhotos-140301755-300x200.jpg\" alt=\"Business team analyzing market research\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.rikardneal.com\/blog\/wp-content\/uploads\/2020\/07\/ThinkstockPhotos-140301755-300x200.jpg 300w, https:\/\/www.rikardneal.com\/blog\/wp-content\/uploads\/2020\/07\/ThinkstockPhotos-140301755-768x512.jpg 768w, https:\/\/www.rikardneal.com\/blog\/wp-content\/uploads\/2020\/07\/ThinkstockPhotos-140301755-1024x682.jpg 1024w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>Like many business owners, you may have structured your business as an S corporation because of the tax benefits it offers. An S corporation provides the same limited liability as a traditional C corporation, but it generally avoids the double taxation associated with a C corporation. You and the other shareholders (if any) pay income taxes on corporate income directly.<\/p>\n<p>Once you have an S election in place, it&#8217;s important to make sure you avoid taking any action that would put the election in jeopardy. Your corporation&#8217;s failure to meet certain tax law requirements on an ongoing basis could result in the IRS&#8217;s termination of its S corporation status.<\/p>\n<ul>\n<li><strong>Ownership.<\/strong> An S corporation generally may not have a corporate shareholder. (Exception: An S corporation may be wholly owned by another S corporation.) All shareholders generally must be individuals, estates, certain trusts, or tax-exempt 501(c)(3) charitable organizations. However, a partnership may hold S corporation stock as a nominee for an eligible shareholder. Nonresident aliens may not be shareholders.<\/li>\n<li><strong>Number of shareholders.<\/strong> An S corporation may not have more than 100 shareholders. For purposes of this limit, a husband and wife are treated as one shareholder, as are certain other related individuals.<\/li>\n<li><strong>Stock.<\/strong> An S corporation may have only one class of stock. Generally, a corporation is treated as having only one class of stock if all outstanding shares of the corporation&#8217;s stock confer identical rights to distribution and liquidation proceeds.<\/li>\n<\/ul>\n<p>We offer a\u00a0FREE initial consultation\u00a0to business owners.\u00a0<a href=\"mailto:ed@rikardneal.com\">Email us\u00a0<\/a>or call us at\u00a0901-685-9411\u00a0today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Like many business owners, you may have structured your business as an S corporation because of the tax benefits it offers. An S corporation provides the same limited liability as a traditional C corporation, but it generally avoids the double taxation associated with a C corporation. You and the other shareholders (if any) pay income [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-197","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business-best-practices","7":"entry"},"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=197"}],"version-history":[{"count":4,"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/197\/revisions"}],"predecessor-version":[{"id":203,"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/posts\/197\/revisions\/203"}],"wp:attachment":[{"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rikardneal.com\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}