Dallas Business Attorney: Choosing the Right Corporation
Posted on | April 10, 2013 | No Comments
Dallas Business Attorney: Choosing the Right Corporation
What is an S corp? How is it different from other corporations?
When you incorporate your business as a corporation, you do so at the state level. Corporations can then elect to be treated under Subchapter C or Subchapter S of Chapter 1 of the Internal Revenue Code. A corporation that elects Subchapter C treatment is known as a C corp or “regular” corporation. A corporation that elects Subchapter S treatment is known as an S corp. Corporations must meet certain requirements to be eligible for S corp treatment.
S-corps are popular among small, closely held businesses, including many family businesses. The great benefit of an S corp is its “pass-through” or “flow-through” tax treatment. This means that an S corp is not taxed at the federal level; only the shareholders pay personal income tax on corporate distributions, such as dividends. This differs from a C corp, which suffers from “double” taxation: the corporation pays taxes on its income, and again the shareholders pay personal income tax on corporate distributions.
Choosing to incorporate your business? Choose the right entity. Choose the right firm: The Wright Firm, LLP, with offices in Dallas and Lewisville, Texas. Please give us a call at 972-353-4600.
Tags: "S" Corporation > business law > Dallas Business Attorney > Dallas Business Lawyer > Texas Business Law > The Wright Firm
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