In this episode, we will take a closer look at the particularities of what it means for an LLC to take an S-Corp election.

Highlights

• Why an LLC with S-Corp election is advantageous for solopreneurs or small business owners
• In-depth breakdown of the four things to consider for any corporate structure
• How the S-Corp election affects member classes and its potential implications to business growth plans
• How taxation rules change with S-Corp election
• The two tax deadlines for LLC with S-Corp election
• Different steps to execute an S-Corp election
• IRS requirement for business owners to pay themselves a 'reasonable salary' with an S-Corp election
• Personal experience about the positive impact of the 'reasonable salary' requirement on self-valuation

Episode Resources

• Book Recommendation: Overcoming Underearning - https://www.amazon.com/Overcoming-Underearning-TM-Simple-Richer-ebook/dp/B000W93AH4
• IRS Form 2553 - https://www.irs.gov/pub/irs-pdf/f2553.pdf
• Connect with Krystal Williams
• https://providentiagroup.com
• https://www.linkedin.com/in/krystaldwilliams

In this episode, I do a deep dive into different corporate structures and the factors a business owner should consider when choosing a structure that's right-sized for their business.

Highlights

• First factor in choosing the right corporate structure: how many owners are there?
• Second factor: personal liability exposure or limitation of liability.
• Introduction to the term 'limitation of liability'.
• Third factor: taxation.
• Fourth factor: corporate record keeping or corporate formalities.
• Discussion of sole proprietorship as a type of corporate structure.
• Overview of the importance of documentation in a general partnership.
• Explanation of deductions in an S corporation versus a C corporation.
• Explanation of taxation with an LLC.
• The need for an Employer Identification Number (EIN) for an LLC.
• Explanation of circumstances where an S-Corp election would be beneficial.
• Explanation of why serial investors prefer the C-Corporation structure for their investments.
• Assurance that changing corporate structure (from LLC to C-Corporation) is possible with legal assistance.

Episode Resources

• IRS Form 2553 - https://www.irs.gov/forms-pubs/about-form-2553
• IRS Form 8832 - https://www.irs.gov/forms-pubs/about-form-8832
• Learn about EINs - https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers
• Free Online EIN Application - https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
• https://podcasts.apple.com/us/podcast/unhire-me-legal/id1728670993
• Connect with Krystal Williams
• https://providentiagroup.com  
• https://www.linkedin.com/in/krystaldwilliams