S Corporation

Incorporate your S Corporation, with Getting Incorporated™'s S Corporation filing service. Incorporating your S Corporation protects your personal assets with limited liability protection from your business assets, and can also be used to separate business assets from each other. An S Corporation also allows for pass-through taxation to avoid double taxation. Getting Incorporated™ can incorporate your business as a S Corporation in the state of your choice.

Business Law Update:

Virginia

HB 1451

Limited partnerships; distributions of assets. Provides that, except as provided in the partnership agreement, upon the winding up of a limited partnership, its assets, after payment to creditors and to partners and former partners in satisfaction of certain liabilities, shall be distributed, when the winding up is due to an order of the State Corporation Commission, to partners respecting their partnership interests. If the winding up is due to another reason, the assets shall be distributed to partners first for the return of their contributions and secondly respecting their partnership interests, in the proportions in which the partners share in distributions. Currently, the distribution of such net assets is made to partners first for the return of their contributions and secondly respecting their partnership interests, without regard to what caused the winding up of the limited partnership. Current Bill Status: February 12, 2008 in Commerce and Labor Committee

Start Up Tip:

S Corporations are Tax Leveraged Entities

When your S-Corp makes money, your profits will be minimized by the salary you pay yourself, and your S-Corporation distributions are not subject to 15.3% in FICA taxes. Conversely, if your S-Corp happens to lose money, your losses will be exaggerated by the salary you have to pay yourself. Thus, if your real business losses are $10,000, but you need to pay yourself a reasonable salary of $20,000, then your tax loss will be at least $31,530 ($10,000 business loss + $20,000 salary + $1,530 employers FICA tax share). In this example your business loses $10k to pay you $20k, meaning you really made $10k doing business but are able to claim tax losses of over $30k. S-Corp are highly leveraged tax entities where your tax losses will always be greater than your economic losses, and your tax profits will always be less than your economic profits!

[S Corporation]

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