Flat Fee S Corporation Formation
Linnemeyer Law, LLC helps entrepreneurs and small business owners across Illinois form and maintain S corporations. An S corporation is a corporation that has filed an election with the IRS to pass corporate income, losses, deductions and credits through to the corporation’s shareholders. An Illinois S corporation is formed by filing Articles of Incorporation with the Illinois Secretary of State and filing an election for the corporation to be taxed as an S corporation.
Linnemeyer Law offers flat-fee arrangements for the formation of S Corporations. These flat fees start at $500.00, plus costs, and include the services listed below. Linnemeyer Law will form your S Corporation quickly, professionally and completely. Linnemeyer Law handles the S Corporation formation process from start to finish. The flat fee quoted by Linnemeyer Law will include everything needed to incorporate (form) your S Corporation and prepare critical governance documents for the S Corporation.
Flat fee formation of S corporations includes the services listed below:
- Initial Consultation
- Name Availability Search
- Prepare and File Articles of Incorporation
- Obtain EIN (Employer Identification Number) from the IRS
- Prepare and File IRS Form 2553
- Initial Shareholder and Board of Directors Resolutions
- By-Laws
- Stock Certificates
- Registered Agent Service for no additional cost
Most single shareholder S corporations will be formed for a flat fee of $500.00, plus costs. Fees for multi-shareholder corporations increase based on the number of shareholders and the complexity of the business structure. To get started, complete Linnemeyer Law’s S Corporation Formation Intake Form and an attorney will contact you with a quote for the formation of your S-Corporation.
In addition to the formation of S Corporations, Linnemeyer Law, LLC provides comprehensive legal representation of small and mid-sized businesses. This includes contract review, commercial real estate matters, mergers and acquisitions, venture capital and private equity financing and many other business and legal services.
FREQUENTLY ASKED QUESTIONS:
How long does it take to form an S Corporation?
Without expedited service, the formation of an Illinois S corporation takes approximately 3 weeks. However, with expedited service, an S corporation can be formed in 2-3 business days. Emergency 24-hour expedited service is available in certain circumstances. Additional costs and fees apply for expedited service.
What are the filing fees associated with forming an S Corporation?
The filing fee paid to the Illinois Secretary of State to file the Articles of Incorporation to form the Corporation is $150.00. There is an additional fee of $100.00 for expedited filing service. Additionally, there is a $10.00 postage fee for the certified mailing to file the S-election with the IRS.
Should I form an S Corporation or a Limited Liability Company?
This determination is made on a case-by-case basis after considering several factors, including the purpose of the business, the number of owners, the amount of gross income the company is expected to generate, and several other factors. A common alternative to an S corporation is a limited liability company that elects to be taxed as an S corporation. An LLC that elects to be taxed as an S corporation enjoys the tax benefits of being taxed as an S corporation and the simplified governance structure of a limited liability company.
What are the benefits of a corporation electing to be taxed as an S Corporation?
There are two main benefits to a corporation that elects to be taxed as an S corporation. First, unlike a C corporation, an S corporation is not subject to double taxation. Second, self-employed shareholders of an S corporation are not required to pay self-employment tax or FICA tax on distributions. In a C corporation (or a single-member LLC) for self-employed individuals, all business income is subject to self-employment tax or FICA tax through wages. However, in an S corporation, only the salary that the shareholder-employee is paid is subject to employment taxes. Distributions (the profit passed on to the owner/shareholders after salary ) are not subject to employment taxes. The shareholder-employee of an S corporation must pay himself or herself a reasonable salary, which is subject to FICA taxes. However, distributions paid to the shareholder-employee in excess of the reasonable salary are not subject to FICA taxes.
Does an S Corporation need a Shareholder Agreement or Buy-Sell Agreement?
A Shareholder agreement is a legal agreement that defines the rights, responsibilities and obligations of the shareholders in a corporation. A buy-sell agreement is a type of shareholder agreement that defines the obligations and restrictions applicable to the transfer and ownership of shares, including the transfer or buy-out of shares following a shareholder’s death, disability or termination. Most single-shareholder S corporations do not need a Shareholder Agreement or Buy-Sell Agreement. We recommend that all multi-shareholder corporations have a Shareholder Agreement or Buy-Sell Agreement to control the transfer of shares and define the rights of the shareholders following a shareholder’s death, disability or termination.
Who can be a shareholder (owner) of an S corporation?
The IRS limits the individuals and entities that can be shareholders of an S corporation. Shareholders may only be individuals, certain trusts, estates and certain exempt organizations. Shareholders must be United States citizens or residents. Shareholders may not be non-resident aliens, partnerships, corporations, LLCs or most foreign entities. An S corporation cannot have more than 100 shareholders.
What are the governing documents of an S corporation?
Initially, all Illinois corporations should have shareholder and board of directors resolutions, by-laws and stock certificates. As discussed above, corporations with more than one stockholder should have a shareholder agreement or buy-sell agreement. All recommended corporate governing documents are included in Linnemeyer Law’s flat fee S corporation formation. Corporations that accept venture capital (typically C corporations) have details Articles of Incorporation with provisions that define the rights associated with each class of stock, a voting agreement, investors’ rights agreement and a right of first refusal and co-sale agreement.
To get started, complete Linnemeyer Law’s S Corporation Formation Intake Form and an attorney will contact you with a quote for the formation of your S-Corporation. For questions, or for expedited service, email attorney Jonathan Linnemeyer at jlinnemeyer@linnemeyer law.com or call Linnemeyer Law at 630-332-3600.