Opening an S corporation in California is highly beneficial because it offers limited liability and pass-through taxation (for federal purposes), as well as the ability to structure compensation and distributions. It minimizes self-employment tax while maintaining the credibility and formality of a corporate entity.
If you’re curious to know about how to start an S corporation in California, note that, to open an S corporation in California, it’s mandatory to first form a C corporation by filing Articles of Incorporation with the California Secretary of State. Then, an EIN from the IRS is obtained, and S corporation status is finally elected. Finally, file IRS Form 2553 within two months and 15 days of the corporation’s incorporation date.
How to Open an S Corporation in California
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