How do I form an S-Corp?

[ctrl+alt+del]

Can someone please provide me with a link to where I can go to form a Texas S-Corp? I certainly appreciate it.

c+a+d

 

[TxStHorn]

Texas Secretary of State Forms

 

[Mack Tripper]

Are you sure you want to do that?

 

[111]

Why S, what sort of business you into? Looking to go public? Easier and cheaper methods...

 

[ctrl+alt+del]

Mrs. Reboot and I have several ventures that we would like to have under the same corporate umbrella. She is a Southern Living consultant who has "parties" where clients purchase home decor catalog items. I am in the process of selling an All-Purpose seasoning and we have rental property as well. None of these ventures are our primary source of income as we both work.

Is an S-Corp not the way to go? Is an LLC more prudent? If so, what are the steps I need to take? Thanks everyone!

c+a+d

 

[Bookman]

You don't form an "S-Corp." You form a corporation, under Texas law, and elect to be taxed under Supchapter S, Chapter 1, Subtitle A, of the Internal Revenue Code.

 

[CO Horn]

Don't put real estate in a S-Corp. Form a LLC for the real estate.

I don't know a lot about your situation, but I would suggest the following:

Set up a LLC for the real estate. If the real estate is held jointly you might want to set up a separate LLC for each property. It will provide additional liability protection, but will also require additional tax returns.

If the property is held individually you could have one LLC as the "holding company", and have separate single-member LLC's hold each individual property. The single-member LLC's would be owned by the "holding company" LLC. Only one tax return would need to be filed. Single-member LLC's are new, and there is some question as to the liability protection they afford.

The other business ventures could be S-Corps. You may want to have one S Corp for each venture.

If the main purpose is liability protection, make sure you don't "pierce the corporate veil". Have separate bank accounts for each entity. Don't pay for personal items out of these accounts. Don't pay for business expenses out of personal accounts. Don't use personal credit cards for business expenses and vice versa.

 

[Mack Tripper]

Most of our clients put real estate holdings in limited partnerships. One reason is to avoid paying the state franchise tax.

 

[CO Horn]

Good point about LP's. I forgot about that pesky Franchise Tax, not living in Texas.

 

[mouthpiece]

An S Corporation and an LLC are virtually the same. Both pay franchise taxes, both provide limited liability, and both avoid double taxation.


An LLC is simpler to set up and maintain, from a legal point of view, and a little more flexible.

The one advantage of an S Corporation is that you can avoid some self-employment taxes (Social Security and Medicare).

 

[CO Horn]

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[tropheus]

any entity type treated as a partnership can get damn complicated -- the curse of the "flexibility".