S-Corporation Election

Hello Guys,
Please tell me How is an S-Corp managed and taxed and benefits of S-Corporation Election?

 

The S corporation structure can be especially beneficial when it comes time to transfer ownership or discontinue the business. These are Advantage of S Corporation Election

1.Separate Entity
2.Liability Protection
3.Personal Service Corporation Issues
4.Shareholder Agreement

 

S Corp election eliminates double taxation that occurs as a C Corp. Revenues are not taxed at the corporate level, salaries and dividends from the s corp are taxed on individual tax returns

 

The reason you incorporate with any type of corporation structure is to protect your personal assets from any liability that may be incurred by your business. Not much else benefit from incorporating (in fact, there is only more cost associated with a corporation like reporting, fees, taxes, etc.) However, if you only have a small number of shareholders, you can incorporate as an S Corp or an LLC and only be taxed as if you were an individual (for the most part.) A C Corp allows for unlimited shareholders, but the tax consequences are much worse than either of the other corporation types.

 

I guess Legally S corporation has an advantage over its C counterpart in terms of tax relaxation. They are relieved from the double taxation process. Besides, S corporation shareholders can be treated as the business’ employees and are entitled to receive salaries as employees. In addition to this, owners of an S Corp are liable to report profits and losses only on their income.